Singapore

THE future of banking in Singapore is well nigh upon us. Some may blanch at the thought, but shopping online will soon be an offering from your bank.

The three Singapore banks are raring to go, they have told The Business Times. They are just waiting for the green light from the regulator to launch online shopping malls. In the meantime, why not check out what others have already done?

The purist may find it a little tacky as some banks' online malls feature all manner of goods from bras to buffets. There, detergent and skincare products commingle with gold bars and coins: hypermarket meets Fort Knox.

For some reason that presumably can be laid at the door of Big Data, underwear features prominently in Chinese banks' online malls, while cosmetic surgery is on the mall of Emirates NBD - a leading Middle East bank.

Last week, Finance Minister Heng Swee Keat said the Monetary Authority of Singapore will streamline the anti-commingling policy so that banks can invest up to 10 per cent of their capital funds in non-financial businesses.

They will be able to operate digital platforms that match buyers and sellers of consumer goods or services, as well as conduct the online sale of such goods or services.

The anti-commingling framework, introduced in 2001 to separate the financial and non-financial businesses of banks, was intended to ensure that banks remained focused on their core financial businesses and competencies.

But, as Mr Heng noted, the line between financial and non-financial business is blurring. "Banks are facing increasing competition from online and non-financial players that have leveraged their large user base to provide digital wallets, payments and remittance services," he said.

Some of China's largest banks, which are also the world's biggest financial institutions by assets, have already operated online shopping malls for a few years.

China Construction Bank, which launched its buy.ccb.com in 2013, has a product-packed portal to lure shoppers. CCB decided to operate its own consumer mall after a lending partnership with e-commerce giant Alibaba ended in 2011.

ICBC Mall (Rong E Gou in Chinese which sounds like "buy easily") is owned by China's largest bank. Started in 2015, it offers what it says are nearly 10,000 best sellers: from home appliances, automobiles and financial products to clothing, shoes and hats, food and beverage, jewellery, transportation and travel deals.

Rong E Gou offers flexible payment schemes, including instalments for more expensive goods.

ICBC's 2016 annual report said ICBC Mobile had 253 million customers, including 66 million active mobile terminal users, up 64 per cent on year. The e-commerce platform ICBC Mall reached an annual transaction volume of RMB1.27 trillion (S$257 billion).

Its instant messaging platform ICBC Link had 66.49 million customers, 12.4 times that at the beginning of the year. Its Internet financing increased by RMB105.7 billion to RMB629.3 billion, making ICBC the largest Internet financing bank in China.

Emirates NDB got into online shopping by launching SkyShopper in May 2017.

Go to the bank's website and SkyShopper's offerings pop up along with more conventional banking products. Pride of place goes to three deals including 25 per cent off at the American Academy of Cosmetic Surgery Hospital for a range of services.

SkyShopper has also partnered e-commerce portals in India and the US; it said there are 50 million products on US e-commerce stores.

SkyShopper said it is a platform only for displaying offers extended by merchants to Emirates NBD's customers, and the bank is not selling/rendering any of these products/services. The bank said it merely facilitates payment for its customers and earns no fees by hosting the website.

Singapore banks say they are ready to bring online shopping to their customers. DBS has already dipped its toes into the waters with a link to car site Carro since December.

Carro leverages DBS' website traffic to connect potential car buyers and sellers and is designed to provide a seamless purchasing or selling experience for customers, said a bank spokeswoman.

"A potential car buyer is served a list of used cars based on their budget, while potential car sellers are given relevant information around redeeming their car loans after the sale, and are then connected to Carro to list their cars for sale," she said. The platform has attracted some 75,000 visits since its December launch.

Jeremy Soo, DBS Bank head of consumer banking group (Singapore) said that, as Singapore's largest digital bank with some 2.6 million Internet banking customers, the policy change will mean becoming more effective in connecting buyers with sellers online.

"The opportunity to create an online marketplace which leverages our digital capabilities, partnerships and wide customer base is an exciting prospect we're eager to explore," he said.

A United Overseas Bank spokesman said the bank welcomes the MAS move to streamline the regulatory requirements on banks conducting or investing in permissible non-financial businesses and awaits more clarity on the operational details.

Pranav Seth, OCBC Bank head of e-business, business transformation and fintech and innovation group, said the future is where banking is embedded everywhere into day-to-day life, commerce and financial decisions.

"For example, if we can provide a loan for a new refrigerator while they are browsing or comparing different fridge models online, this would definitely improve customers' experience and can potentially create significant opportunities for the bank."

The MAS will provide operational details of the policy changes in a consultation paper that will be released by the end of September.