Those alerts flagged portfolio stocks that hit 52-week lows, enabling customers to swiftly cut their losses or buy on the dips.
In all, DBS relayed 30 million such “nudges” in a month to its 3.5 million customers, an innovation which is front and centre of the thriving digital pivot taken by the bank.
The nudges are personalised by an artificial intelligence program that analyses a customer’s assets and transaction history.
Not only are the messages themselves customized, but the nudges are also tailored to “ping” at optimal times.
A client who habitually plays the currency market before going to work, for instance, will receive forex prompts in the morning.
Another who prefers close readings of information on a desktop computer after work would receive full emails from DBS rather than social media notifications.
Nudges also provide clues that DBS customer service representatives can use for face-to-face meetings with clients.
Whether a client clicked on a nudge can inform a personalised investment strategy.
DBS was first formed in 1968 through a mix of public- and private-sector investments, with the initial purpose of supplying corporations with long-term funding.
The bank has remained an irreplaceable fixture in Singapore’s industrial development and the growth of its businesses.
DBS led the initial public offerings of household names such as Singapore Airlines and the telecommunications carrier Singtel.
Temasek Holdings, Singapore’s state-backed investment company, owns roughly 30% of DBS, underscoring the tight links between the bank and the government.
Shepherding the digital transformation of DBS is the current CEO, Piyush Gupta, who assumed the role in 2009 after being recruited from Citibank.
Gupta implored all employees to adopt a start-up mindset, and DBS hired AI experts and big-data analysts in droves.
The company now boasts 10,000 information technology employees, accounting for around 30% of the total headcount.
DBS has recruited over 1,000 IT workers from the hackathons it started hosting in 2019.
One person hired through that route, Julian Chang, used to work on aircraft engines before participating in last September’s hackathon.
Chang, 29, has been working at DBS’ consumer banking technology team since January.
“At DBS, the business and tech teams are treated as equal partners, and oftentimes the tech teams can shape the contextual application of solutions together with the business teams so that we can jointly deliver the best possible outcome for the customer,” said Chang.
The DBS group automates all work that can be performed digitally.
Right now, its securities brokerage arm, DBS Vickers, does not partner with a single human remisier – or half-commission broker – for the retail business.
Thanks to the success of DBS’ digital transformation, recent earnings have been strong, with the bank turning in a record net profit of S$6.8 billion last year.
The nudges are the product of the intelligent banking project spearheaded by Gupta and are modelled on notifications from Netflix or Spotify.
“We have this slogan, ‘Live more, Bank less’,” said Sim Lim, head of DBS’ consumer banking division.
“It’s not that you are banking less, but we are so embedded into your life that you are using us even without realising that you’re using us. Our concept is how do we target customers without calling them, but nudging them?”
Besides investment advice, the electronic nudges are sent for such matters as reminders to pay a utility bill or to alert a suspicious ATM withdrawal.
They can recommend credit cards that provide the most perks for a shopping mall most frequented by a subscriber.
DBS also sends nudges for customers outside of Singapore.
For example, when Indian tourists visit the city state, they receive information on shopping discounts on their smartphones.
DBS is exploring a collaboration with another company to offer taxis for customers who work overtime late into the evening.
Meanwhile, DBS has hired a team that spots which nudge has declined in engagement.
The notification is either reedited to enhance performance indicators or retired entirely.
DBS steers clear of firing off a blizzard of push messages in the hopes that some will stick.
Investing related nudges only offer factual statements, stopping short of recommending any particular stocks.
Digitalisation has raised DBS’ productivity, which has directly led to higher earnings. Retail and small business clients account for 58% of DBS’s total customers, with over 75% of those transactions processed digitally.
Digital transactions account for 96% of group operating profit and their return on equity stands at 23%, almost five times higher than the 5% ROE for non-digital transactions.
“In the past, one relationship manager handled 100 customers, but now we are forming business analytic teams whereby 10 people handle 500,000 customers,” said Lim.
“Technology lets you scale and the ROE will definitely be higher.”
Singapore looks to emulate DBS’ example.
In a speech delivered last Tuesday, deputy prime minister Heng Swee Keat announced the launch of Project Guardian, a pilot exploring decentralised finance.
It will be led in part by DBS and JPMorgan.
“We must approach emerging disruptions with openness,” said Heng.
The decentralised finance project involves the creation of a liquidity pool that includes tokenised bonds and deposits.
This will balance the adoption of crypto assets with safeguards for users.
“Let us not throw the baby out with the bath water,” said Heng, embracing the fintech disruption.