Singapore’s United Overseas Bank (UOB) will launch a digital bank for the ASEAN region, it announced in a press release issued on Friday (3 August).
Targeting an increasing base of ‘mobile first’ and ‘mobile only’ customers, UOB’s Digital Bank will be deployed in its key Southeast Asian markets - Singapore, Malaysia, Indonesia, Thailand and Vietnam - and aim to reach up to five million new customers.
UOB’s main competitor, also Singaporean DBS Bank, has already launched mobile-only offerings in India and Indonesia but not in other countries of the region. DBS, which holds a strong lead in tech innovation, is behind PayLah and Digibank, both cloud-hosted payment solutions.
“All our efforts are driven by what is best for our customers”, said Wee Ee Cheong, UOB’s Deputy Chairman and CEO. “We harness our technology, knowledge and experience gained across all markets to provide our customers with relevant, smart, simple and safe solutions wherever they may be. The [UOB] Group’s Digital Bank is our latest initiative to deepen engagement with our customers, especially the mobile savvy. It will also help scale up our customer franchise across Southeast Asia and positions us well for the future.”
Customer acquisition vs customer engagement
Although digital banking is not a new feature for UOB (it currently offers UOB Mighty, a phone-based electronic wallet which allows instant payments), the new Digital Bank is exclusively mobile-only and in its initial stages will target the mobile-savvy Generation Y and Z customers.
According to Dennis Khoo, UOB’s Head of regional Digital Bank and Digital Banking, what will differentiate UOB’s Digital Bank from other forms of digital banking is its focus on customer engagement.
“Our focus for UOB’s Digital Bank is engagement and this guides the whole experience for our customers across Southeast Asia”, says Khoo. “Over the next ten years, the global retail banking industry will undergo significant change driven by innovation, the availability of rich and real-time data as well as the different needs and expectations of the mobile-savvy customers.”
The customer engagement approach of UOB’s Digital Bank is based around its data-centric business model. According to UOB, this model is designed to address the entire customer life cycle comprehensively, ensuring the quality of each encounter to deepen relationships. The business model comprises five stages: Acquire, Transact, Generate data, Insight and Engage (ATGIE).
UOB’s ATGIE business model is powered by next-generation artificial intelligence, machine learning, data analytics, user interface design and smartphone capabilities. These include UOB’s own digital technology innovations as well as solutions provided through its collaboration with fintech partners such as its recent joint venture with Avatec.ai and its investment and partnership with Personetics.
The Digital Bank announcement comes after the recent publication of strong performances among Singapore’s banks, with both UOB and DBS announcing record first-half earnings in consecutive days, in UOB’s case of S$2.05 billion achieved on a 10% year-on-year increase in total income to S$4.57 billion.