DBS Bank, which may become the first foreign bank to set up an Indian subsidiary, plans to acquire customers through fintech firms rather than spending much in physical
But the bank is not looking at buying strategic stake in such firms or payment apps in India at this point like it did in Singapore, bank chief executive Piyush Gupta told ET.
It has inked tie-ups with cabs aggregator Ola and financial products market place Paisabazaar in India and looks to take a few more on board for customer acquisition,
deputy group head for consumer banking Pearlyn Phau said.
"We are open to explore opportunities for strategic stakes in fintech companies," Phau said. "But there's no active plan at present."
The bank has invested in Carousell, an online payment app in Singapore to offer financial products and payment services on its platform in thesovereign city-state in Southeast Asia.
In India, it is now busy in converting itself as a banking subsidiary. It is expecting the final license from Reserve Bank of India in a month or two to set up the wholly owned unit.
RBI allowed foreign banks to set up subsidiaries in 2013. Operating as a subsidiary would remove the restrictions in business expansion in India including the one that pertains to opening of branches.
As spending in physical infrastructure is costlier than digital mode of expansion. DBS Bank plans to take it branch count to merely 50 from 12 now over the next year. State Bank of India, has over 22000 branches.
DBS, will be targeting India's 36.5 crore affluent and energing affluent customers through digital channels. At present, it has a skeletal consumer banking business in the country.
The bank plans to offer financial products mostly through smartphones as part of the digital journey.
"We started thinking ourselves not as a bank but as a fintech company," Gupta said. "In India, 100 percent of our offerings will be through digital platforms."
He said that bank would leverage data for lending and cross-selling products and build front-to-back digital servicing model using artificial intelligence-enabled chatbot to
minimise manual processing.
It has invested Rs 500 crore in March 2018 to take its total capital in India to Rs 5,000 crore.
Re-dessiminated by The Asian Banker from Economictimes.com