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DBS (Development Bank of Singapore)
14-01-2020, 11:20 PM. (This post was last modified: 15-01-2020, 01:09 AM by dreamybear.)
Post: #201
RE: DBS (Development Bank of Singapore)
I wonder what is the competitive advantage of a digital bank especially if it is just relying on operational & cost efficiency and data mining. Currently, most traditional banks already have quite a substantial online presence and comprehensive offerings.

If one factors in compliance(KYC, money laundering), regulations and deposit insurance, I believe the cost of operating a digital banks may not low.

Previously, the "hype" was peer-to-peer lending/crowdlending where investors can choose to lend to people shunned by banks, but it may not end up well.
https://www.dw.com/en/chinas-peer-to-pee...a-47634861

For my personal stock portfolio, I am not worried abt the competition brought abt by digital banks unto the traditional dominant local banks.
( UK’s bank challengers are fading in fight with big four - https://www.ft.com/content/77ef93ec-e100...5a370481bc )

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Access to good data 'key to winning digital bank licence
Published Jan 11, 2020, 5:00 am SGT

With many hats thrown into the ring, access to good data will determine who wins Singapore's digital bank race, brokerage Maybank Kim Eng said this week....

The applicants are targeting groups that they view as underbanked - low-income individuals, early-income millennials, start-ups and micro small and medium-sized enterprises....

https://www.straitstimes.com/business/ba...nk-licence

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15-01-2020, 07:43 AM.
Post: #202
RE: DBS (Development Bank of Singapore)
The new players may not possess revolutionary technology, but their mere entrance into the market will mean that more competitive offerings for customers will be introduced.

Since it is in the regulator's interest that the new entrants can offer better value proposition to customers, and do so in a sustainable manner over the long run, it is likely that they will pick the ones with the best prospective business model.

Particularly threatening to the 3 local banks will be the 2 new deposit-taking digital banks. Grab/singtel appears to have the greatest potential to gain market share, given the size of their existing customer base. Even if they do not lower their own net interest margin by borrowing at a higher cost and lending for a lower fee -- which is unlikely, at least during the initial period -- they can offer banking+transport+telecom packages that offers superior value.

The 3 local banks will respond, but most likely in traditional ways which means lowering their net interest margin. Ditto for the 3 finance companies, and the 3 pawnbrokers.

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