How Singapore’s incumbent banks are preparing for competition

IN 2014, AS ALIBABA was preparing to list in New York, Piyush Gupta, the chief executive of DBS, Singapore’s biggest bank, was watching with growing alarm. Together with his bank’s chairman, Peter Seah, he arranged a meeting with Jack Ma, Alibaba’s founder, and Joseph Tsai, then its chief financial officer. “I walked away scared out of my wits that they will change our industry forever,” says Mr Gupta. Many bankers, particularly in America, seemed convinced that onerous regulations would protect them from challenge, or that regulators would dampen competition for fear of destabilising the sector. To Mr Gupta that seemed complacent. “Ant shows that there’s more than one way to skin the cat,” he says. “They are getting the customer relationship and the data to create value, and then passing the regulated part of the activity to banks.”

The meeting left him determined to disrupt his own bank before Ant, or another challenger, had a chance to do so. He considered spinning off a separate unit to lead the transformation, or outsourcing some of it to fintech firms, but decided that DBS was capable of rebuilding itself. “The received wisdom is that it’s impossible to change culture,” he says. “But I had gone back home to Delhi to visit my dad, who’s in his 80s. He banked online, paid his taxes online, shopped on Amazon—so what makes us think...