DBS’s visionary CEO Piyush Gupta speaks to Danielle Myles about the bank’s growing wealth management business, how technology will overhaul today’s banking model, and the secret to successful entrepreneurship.

Piyush Gupta embedded

Piyush Gupta is not your average bank CEO. The boss of DBS cut his teeth as country head of some of Asia’s tiger economies, held 20-odd positions at his previous employer Citi spanning everything from operations to corporate banking, and took a one-year hiatus to launch an Indian internet portal.

This eclectic career has shaped his pragmatic and progressive approach to running south-east Asia’s biggest bank, and it has benefited DBS immensely. Over the course of seven years, Mr Gupta has transformed a slightly bureaucratic and risk-averse lender into a regional powerhouse, whose forward-thinking, nimble business model is often compared to a start-up.

His career is also the genesis of the bullishness on Asia’s growth story that, along with technology’s transformation of the banking business, underpin his ethos. When Mr Gupta ran Citi’s strategy group for emerging markets the mid-1990s, Asia’s megatrends – namely its growing consumer class, urbanisation and trade relationships – had existed for a decade or so. But witnessing them first hand made this a pivotal time for him.

“Doing that work, it became clear that talk of 'the Pacific century' and the shift of the centre of gravity from the Atlantic to the Pacific wasn’t just idle words. You could see it happening, and it was obvious that this was a once-in-a-lifetime shift,” says Mr Gupta. “A lot of my thinking was shaped in those days.”

Asia’s megatrends

It is no surprise, then, that the Singapore-headquartered bank he runs today has a big presence throughout greater China and south-east Asia, and is most focused on the region’s three growth markets.

China, India and Indonesia’s large populations and $1500bn to $2000bn gross domestic products that are growing at about 6.5%, 7% and 5%, respectively, make these markets a no-brainer for DBS.

“Winning in these three markets is crucial to our long-term success,” says Mr Gupta. He adds that he does n0t plan to enter any new countries in 2017 but will consolidate the bank’s presence in these core markets, particularly the two picking up the most steam.

“China is obviously going through a transition, which means you must be somewhat more circumspect about our opportunities there in the short term. So I think India and Indonesia will be our big areas of focus in 2017,” he adds.

DBS’s leadership team has also chosen a handful of businesses whose potential it expects to grow alongside Asia’s economies. They are cash management, foreign exchange, debt capital markets (DCM) and, most significantly, wealth management.

The huge volume of funds controlled by Asian family offices creates lucrative opportunities for the region’s banks, and Mr Gupta moved to take advantage shortly after joining DBS. Over the past six years, the size of its wealth management business has quadrupled.

“It used to be about 7% [by group revenues] of the bank but it is now getting to about 13% or 14%,” he says. “Over the next five years, we think it could get up to 20% of the bank.”

Acquisition strategy

This growth is in no small part due to DBS's takeover of Société Générale’s Asian private banking business in 2014, and its September 2016 acquisition of ANZ’s wealth management (and retail) operations in five of its key markets.

The deal with the Australian bank brings in $20bn or so of assets under management and some 3000 private banking clients, solidifying DBS’s status as Asia’s fifth biggest private bank. Having done the deal with Société Générale a few years ago, Mr Gupta is confident DBS can leverage the business’s new scale very quickly.

In addition to aligning with DBS’s strategy, the ANZ purchase is underpinned by a strong economic rationale. “We think we can make it return on equity-accretive within a year. And in the next two or three years we should be able to add some $600m or $700m to our top line, and a few $100m to our bottom line,” says Mr Gupta.

Among the businesses core to DBS’s strategy, one notable exception is investment banking. “We don’t really have aspirations to be a bulge-bracket player in equity capital markets (ECM) or even global mergers and acquisitions. Our size and focus allows us to do good business with our client base in a profitable way, but it won’t be something that really moves the needle for us,” he says.

The bank will continue its respectable fixed-income, currencies and commodities business, particularly foreign exchange, local DCM and more structured products, such as covered bonds that complement conventional debt offerings. But Asian ECM’s low fees and growing syndicate sizes diminish its profitability for bank intermediaries. Indeed, Asia’s relatively low fees are thought to be one of the reasons why some global players, including Goldman Sachs and Bank of America Merrill Lynch, have recently downsized their regional operations.     

Reimagining banking

In recent years, Mr Gupta has become the banking industry’s poster boy for technology. His firm belief that digital technology can create a more efficient banking model that is also completely customer-centric makes him an undisputed thought leader in the area. When asked to explain his vision, Mr Gupta – sounding more like a tech strategist than a banker – focuses on two lines of thought.

First, he says, banking should be inseparable from the service or goods for which the customer has approached the bank in the first place. Obtaining a mortgage should not be a separate process to buying a house. Instead of taking out an auto loan, people should just have to think about buying the car.

“Our vision is that you have to make banking so seamless and so integrated into people’s real lives that it effectively makes the bank invisible,” says Mr Gupta. “And to do that, you really need to reimagine the future of banking.”

Alongside the likes of Citi, ING and BBVA, he sees China’s banks at the forefront of technological advancements. He tips two in particular to watch. “Minsheng Bank and Ping An Bank are doing some fairly extraordinary things,” says Mr Gupta. “Ping An has captured our thinking about making the bank invisible and integrating it into users’ ecosystem better than anyone else.”

In 2012, the former insurance company purchased a sizeable consumer lending business and since then has integrated its respective credit offerings into real estate, auto dealerships and other companies it has since acquired.    

The second way Mr Gupta sees technology up-ending banking is in transaction processes and operations. The costs of traditionally paper-heavy processes such as loan applications, know your customer and account openings can be cut substantially through digitisation, robotics and smart analytics. These back- and mid-office advancements should not be underestimated.

When asked to identify DBS’s biggest technology initiative launched in 2016, unsurprisingly Mr Gupta highlights Digibank, the paperless, branchless and signature-less consumer business it launched in India in April, and plans to expand into its other markets starting with Indonesia in the coming months.

However, he is quick to point out everything else going on in the background of DBS’s major offices. “The reality is we are doing 1000 different experiments in 1000 different parts of the bank. Big data is being used in branch auditing and by our operations people to rethink the cash cycle; and our human resources team is targeting recruitment using analytics and predictive technology.” 

People power

This outside-the-box approach to recruitment can be traced back to Mr Gupta’s time at Citi. While most CEOs build their career on client-facing roles covering a handful of business lines, he has overseen everything from product management to consumer banking to technology, and everything in between. He understands how many different parts of the bank operate and interact, giving him a first-hand understanding of what is needed to make them function.

This means he is willing to look for talent in other industries. At both Citi and DBS, Mr Gupta has hired numerous people from fast-moving consumer goods and technology companies, and has found their experience and knowledge to be transferable.

“My experience has been that it is possible to make good bankers out of non-bankers,” he says. “So long as you give them the right input, they can be very adaptable to banking, and sometimes they are surprisingly good at bringing some very different skill sets.”

Mr Gupta’s open-mindedness can perhaps be exemplified by his decision in 2001 to leave Citi and partner with Hindustan Times to launch Go4i, an internet portal. Like many other dot-com ventures at that time, this failed to take off and he returned to the US bank a year later. Ironically, this experience added little to his technology-credentials – as it was not very advanced at the time – but it left him with a new-found ability to take risks in his career.

It also explains his start-up mentality and his desire to challenge the status quo. “I think entrepreneurs are successful sometimes because they’ve lost the inhibitions that prevent them from making some bold moves. And once you have done it, your capacity to do it repeatedly significantly improves,” he says.

With a CEO who challenges the banking model and is so focused on people achieving their potential, DBS bankers may be among the luckiest in the industry.  

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