Activity on the wealth management platform, which was launched to much fanfare in November 2019, has picked up substantially during the past few months, according to senior executives at DBS.
In the five months between the start of this year and the end of May, equity trades via the app increased 80% and the number of programmed price alerts doubled. Mutual fund and foreign exchange transactions also increased, although less dramatically, rising 5% and 9% respectively.
The i-Wealth app took two years to develop, and it incorporates instant identity verification, biometric recognition and state-of-the-art digital security, DBS Hong Kong CEO Sebastian Paredes said at the launch event in Hong Kong last year.
“Our ongoing digital efforts over the past years gave us a strong foundation, which left us well-positioned to pivot and scale quickly to meet wealth clients’ needs amid Covid-19 this year – a period which has seen a surge in usage of our digital offerings,” Sim Lim, DBS’s group head of consumer banking and wealth management, told a media briefing last week.
According to Lim, DBS started its move towards digitalisation in 2011, and he identified four concurrent processes.
These include the adoption of digital tools, such as chatbots, robo-advisory and digital onboarding, to supplement conventional services (augmented banking), the inclusion of third-party products and services available to customers (open banking), and increasing automation to help with fraud detection and loan approvals (automation banking).
“We have achieved the first three elements over the past years, and are now focusing on the last puzzle piece which we believe will greatly transform the wealth landscape, that is, cognitive banking,” said Lim.
This latest phase basically involves tailoring information, research, recommendations and other investment services to each individual customer. Progress towards that objective is evidenced by the provision of “contextual CIO insights based on their interests”, and the DBS iWealth app, “which was revamped based on customer feedback to become more intuitive and easier to use,” he said.
According to Lim, the private bank generates 21% of the DBS Group’s income. DBS will announce its second quarter results on 6 August, after posting a 29% year-on-year decline in net profit in the first quarter.
Investment approach
Looking to the future, DBS PB has embraced another theme that makes up the fashionable financial services and investment gestalt – namely ESG and sustainable investing.
It plans to ensure that sustainable investments comprise 10% of its AUM within five years, according to Lim.
“DBS Private Bank aspires to be a leading player in Asia’s sustainable investments space,” he said.
For example, DBS PB participated in the issuance of Women Livelihood Bonds in 2017 and 2018, whose proceeds were used to help women in Cambodia, the Philippines and Vietnam. Two years ago it launched a structured product that rewards the investment outperformance of ESG-compliant companies over non-compliant companies.
DBS PB also works closely with the DBS Foundation, which is dedicated to nurturing social enterprises in the region, said Lim.
Meanwhile, its investment advice remains the same as last year.
The firm recommends a “barbell strategy to build portfolio resilience”, which is a two-pronged approach composed of income-generating assets, and stocks that benefit from long-term secular growth trends, such as companies that are capitalising on the digital economy and ageing populations.
