Last Tuesday, the CEO of the largest lender of Southeast Asia said that banks have to be just like technology companies, amid increasing competition from rivals including Alibaba, the Chinese tech giant, with its rapidly developing financial services.
Piyush Gupta, the CEO of DBS, informed CNBC on “Squawk Box” that this means that banks must do a few things such as “embrace” the same technology as they do, and change their culture to be just “like a startup.”
Gupta stated: “One, we got to be able to embrace the same technology that these technology firms do. That’s not tough because technology is freely available. Today you go to Amazon’s website, and you can get everything, open source gives you everything. But you have to be willing to re-architect your fundamental technology to be like a tech firm.”
He continued: “You got to make a culture change. You’ve got to be like a fintech or like a start-up. You’ve got to be nimble; you’ve got to be willing to take some risks, you’ve got to have small groups of people who can really be entrepreneurs in the context and framework of a large company.”
Once the banks would be to able achieve a few of these things, he said that there is “no reason why you can’t compete with the technology platforms.”
With that said, Gupta declared that traditional banks still have some things going for them..
He added that banks maintain good risk management practices whether it is a market risk, credit risk, or liquidity risk and with “plumping pipes” already established in place.
He stated: “So it’s not like we come to this challenge unarmed. Even the fast growing fintechs find they wind up working with banks, for our clearing and settlement capabilities. We have presence everywhere.”