DBS wants a million retail customers invested and insured

Singapore

DBS aims to have in the next few years a million retail customers insured and invested as it looks to tap a more consolidated trove of customer data to ramp up its digital financial advisory tool.

This number now stands at less than half, though 20 per cent higher year on year, as personal finance habits continue to grow, Evy Wee, DBS head of financial planning and personal investing, told The Business Times in an exclusive interview.

Broad-based financial distress due to the pandemic has further pushed banks such as DBS to raise the bar on using data to aid financial planning among the masses.

The lender saw more urgency among customers to check on their financial health, even if they have existing protection, as cashflow became critical amid income instability.

"Covid-19 was a shock to the system. Most will realise that they had better be prepared before the next shock comes," said Ms Wee.

Close to 1.8 million customers have interacted with the bank's in-app financial advisory tool, the NAV planner, since the launch in April. Over 400,000 were able to turn their finances around.

About eight in 10 new-to-fund investing customers arrive via the NAV planner and collectively invested more than S$110 million between August and October this year.

More customers have also started to invest via their Central Provident Fund (CPF) and Supplementary Retirement Scheme (SRS) accounts. Those who topped up their CPF accounts more than doubled as at October, up 63 per cent year-on-year.

Through the NAV planner, a DBS customer can access a broad overview of his finances across various streams such as savings, insurance, and investment, among others.

By toggling his budget, for example, the customer can instantly see how a decision made in the "savings" stream can potentially affect longer-term outcomes in others.

Leveraging its wealth of consumer data as Singapore's largest bank, it is able to use technology to help customers "make sense" of their financial numbers, which ultimately translates into more concrete actions, said Ms Wee. "Planning alone is not good enough... you need to be able to execute that plan."

While the foundation of financial planning has been laid - awareness on the need to save, invest and be insured - the execution step is often thwarted by misconceptions or confusion around data.

For example, there is a common perception that a person has to set aside a specific sum of money for retirement. But the numbers are either too big, which put people off retirement planning, or they are unaware of the gaps to fill to reach their long-term goals, said Ms Wee.

On the NAV planner, customers can use a retirement planning function to project their future cashflow position and assets to identify the blind spots in their planning.

The "Map Your Money" function pools together customers' assets held within DBS as well as under government schemes such as CPF and SRS.

This collaboration with the CPF board gives the bank a fuller set of data to churn out more accurate simulations and projections.

Current insights on the NAV planner are largely based off customers' holdings within DBS and the external data they choose to manually input.

"People don't realise that their monies are everywhere. It's very inefficient because when you don't know where all your assets are, then to project a future view of your assets means you have to find a way to remember everything," said Ms Wee, noting that data-sharing initiatives among industry players can solve this common problem.

DBS's tie-up with the CPF board in August paves the way for more such partnerships to build up a comprehensive financial planning tool.

Numbers reflect the demand for such consolidated platforms - more than 40,000 DBS customers proactively keyed in information of their external holdings into the NAV planner, amounting to S$10 billion in assets under management.

Against this backdrop, the bank aims to lead and set the industry benchmark in digital financial planning, with a broader target to reach every Singaporean in their journey.

"In the past, people had to rely on relationship managers for financial planning. Only the wealthier customers could afford that. But data and technology has made all the difference now... it's possible to help anyone make their money work harder for them," added Ms Wee.

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