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Category: Finance

Retail News Asia is committed to providing both local and global retailers with the latest Finance news throughout the Asian market. This on a daily base.

  • Banks Unprepared for Cyberattacks Risk More Than Half of Profits in Singapore

    Banks Unprepared for Cyberattacks Risk More Than Half of Profits in Singapore

    Thanks that lack measures to withstand cyberattacks risk up to 65 percent of their quarterly profits, according to a recent stress test study by the Monetary Authority of Singapore.

    Direct and indirect impact from cyberattacks against banks are estimated to cause losses of 35-65 percent and 20-50 percent of quarterly profits, respectively. According to the study, profit declines are attributable to reputational impact, funds were stolen, legal charges and marketing expenses.

    The stress tests revealed likely vulnerabilities from theft and disruption-related cyberattacks. Examples of theft-related attacks include hacking of ATMs to dispense cash and bank payment systems. Disruption-related impact includes denial-of-service (DoS) attacks to prevent access to the internet and mobile banking apps or disruption to internal payment processing systems. Damage or corruption of client data was also cited as another example of a cyberattack.

    The aforementioned figures reflect costs without contingency measures and when included, risks are significantly improved with banks expected to lose quarterly profits of 20-35 percent and 12-25 percent from direct and indirect impact, respectively. In order to reduce risks from cyberattacks, banks have adopted multiplied layers of security controls to protect data and funds; added DoS mitigation measures such as clean pipe services; and backed up critical data regularly.

    In-house measures aside, it is also heeding greater attention to third-party service providers. Periodic audits are made to verify the ongoing effectiveness of existing security and business continuity measures are in place for a switch to an alternative provider or to in-house operations in the event of a disruption.

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  • Singapore Fintech SaaS Raises $3 Million for Expansion

    Singapore Fintech SaaS Raises $3 Million for Expansion

    The AI-backed platform hopes to expand to the U.K. and Hong Kong and has already started testing in those markets.

    Osome, a Singapore-based business services firm that aims to digitize traditional corporate management processes, has secured $3 million in funding led by Target Global, with participation from Phystech Venture and AdFirst, the company announced on its blog on Tuesday.

    The raise follows $2 million secured in December 2018 for product development and market testing in Australia and Hong Kong. It was also led by Target Global, a venture capital firm based in Berlin, Germany, with 700 million euros in assets under management.

    Osome is led by Singapore-based serial entrepreneur Victor Lysenko, who has two exits as CEO and founder: Russian neobank Rocketbank and Groupon Russia.

    The firm uses a cloud-based platform to help business owners and entrepreneurs with legal compliance and tasks such as payroll, accounting, taxation, company formation, and filing reports.

    Launched in 2018, the firm has already amassed 2,300 customers in Singapore. It now has its eyes on other global financial centers.

    «The company’s exponential growth in Singapore both in terms of revenue and customer base validates the business model and represents a solid ground for further growth both inside and outside of the region,» said Phystech Ventures partner Olga Maslikhova.

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  • HSBC Hired 300 Private Bankers in a Year

    HSBC Hired 300 Private Bankers in a Year

    HSBC Private Bank stayed on course with its hiring plan in Asia, having boosted regional headcount by 300 bankers in one year already.

    The bank announced last year it would add 700 people to the private bank in Asia by 2022 from a headcount of 1,100 as of 2017-end. The bank has nearly reached half of that goal from hiring 300 bankers thus far and will seek to continue with an eye to increase onshore presence in China.

    The strategy to achieve double-digit asset and revenue growth is working,» said Antonio Simoes, newly appointed global head of private banking at HSBC. And as part of that, Asia is by far the region that is growing the most.»

    Asia currently represents the largest share of the bank’s overall revenue and accounts for 42 percent of its private banking assets. And despite unprecedented unrest from its key market in Hong Kong, the bank still posted a 9.4 percent and 4.6 percent year-on-year rise in assets and revenue, respectively.

    Our third-quarter results showed very resilient performance for Hong Kong against the backdrop of what’s happening,» Simoes said, stressing that the broader China business was unaffected. «From a private banking perspective, we continue to have targets for Hong Kong that are very ambitious.

    Simoes reiterated HSBC’s commitment to the Chinese market amidst a historic opportunity to gain presence as Beijing further liberalizes the financial sector. The country recently made a landmark decision to remove ownership limits for businesses operating in the sector which has attracted foreign wealth managers to take advantage of the opportunity including Swiss rival UBS.

    Going forward, we want to be bigger in onshore China and we are looking at how to do that as regulations change,» Simoes added. «If you take a 10-year view, we will need to be bigger in onshore China.

  • Citigroup President Getting a $12.5 million bonus

    Citigroup President Getting a $12.5 million bonus

    Jane Fraser is landing a $12.5 million bonus as the bank looks to retain a likely successor to Chief Executive Officer Michael Corbat.

    The board’s compensation committee granted the award «in recognition of Fraser’s recent promotion to president and to enhance leadership continuity and management succession planning,» according to the firm’s regulatory filing on Wednesday. Half of the award is in cash and half is in stock, and both will vest in annual installments over four years.

    Fraser, who was promoted to the number 2 job at Citigroup last month, puts her in position to become the first woman to lead a major U.S. bank as the industry is under pressure to improve diversity. In April, a congressional hearing questioned the heads of the largest U.S. banks on why their companies never put a woman in charge.

    Several banking chiefs, including Corbat, responded that they could envision one succeeding them. In Asia, Theresa Foo became the first Asian female chief executive at Standard Chartered, according to the website Singapore Women’s Hall of Fame. In 1997, she was the first woman in the Bank of America’s Singapore operations to be made a vice president.

     

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  • UOB Boosts Solar Power

    UOB Boosts Solar Power

    UOB is pushing solar power usage by offering various financing solutions linked to solar-powered equipment for both business owners and individuals.

    Businesses and individuals in Singapore seeking to adopt solar energy can choose from the bank’s three selected local partners: SolarGy, SolarPVExchange and Sunseap Group. The partners will provide service across installation, commissioning, operations and aftersales.

    For business owners, UOB will provide solar equipment financing and for homeowners, the bank will offer a zero percent interest rate installment plan of up to 36 months.

    The Singapore arm of the initiative is part of UOB’s broader U-Solar program to boost solar power usage across the region. The program first launched in October 2019 before subsequently rolling out in Indonesia and now Singapore.

    Solar power is not only a clean and efficient energy source but has also become a more economically viable option as the technology to harness solar energy matures,» said Frederick Chin, UOB’s head of group wholesale banking and markets. «Despite this, many companies and consumers remain hesitant to adopt solar power, believing that it requires high upfront investment.

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  • Citi Scores Two Investment Bankers in Asia From Rival

    Citi Scores Two Investment Bankers in Asia From Rival

    Citigroup hired two investment bankers from HSBC Holdings in Asia as part of its efforts to strengthen its Chinese real estate advisory business. Kara Wang has joined Citigroup as managing director and co-head of real estate investment banking for Asia, according to an internal memo. The move was confirmed by James Griffiths, Citigroup’s Hong Kong-based spokesman. Dayday Zhou, a director of Wang’s team at HSBC, will join the bank in January, the spokesman added. The latest Citigroup hires will raise the number of Asia corporate and investment banking hires to six since December.
    The U.S. bank is hoping to bolster income in the region, its biggest market outside of North America. In the third quarter, Citigroup’s revenue in Asia grew 6% to $4.02 billion from a year earlier. Meanwhile, HSBC is undergoing huge changes as acting chief executive Noel Quinn undertakes cost-cutting and business transformation Citigroup ranks ninth advising share sales by real estate companies in Greater China, down from fifth in the same period last year, according to data compiled by Bloomberg.
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  • HSBC Targets Singapore’s Salaried Millionaires

    HSBC Targets Singapore’s Salaried Millionaires

    The bank said that globally, Singapore has among the highest share of millionaires whose main source of income is their salary, and they prioritize self-enrichment over wealth accumulation.

    Based on its research that Singapore’s rich are not just focused on becoming wealthier but experiencing life, HSBC Singapore is launching new banking and lifestyle features to meet these needs, the bank announced in a statement on Wednesday.

    As part of this push, HSBC Singapore will add experiential offerings to its high-net-worth Jade platform, which gives wealthy individuals personalized investment solutions and advisory services, the statement said.

    The bank also unveiled its «Enrich List,» which it describes as a «curated portfolio of experiences and a source of inspiration» that can be arranged for Jade clients through its global concierge facility. These experiences relate to the broader idea of enrichment: self-betterment, exploration, taking on challenges and giving back, the bank said.

    Some 40 percent of Singapore HNWIs (people with assets between $1 million and $5 million) list salary and bonuses as the main income source, compared to 26 percent globally, according to a study conducted by HSBC Jade among 1,000 HNWIs in eight countries and territories, including 100 in Singapore.

    Additionally, among this group, 69 percent believe that broadening horizons and discovering new things is an essential part of enrichment, compared to 65 percent globally.

    This evolving Singaporean stratum is not just focused on becoming wealthier but in experiencing life, said Alice Fok, head of Customer Propositions & Marketing, HSBC Bank (Singapore).

     

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  • DBS Awards Nine Social Enterprises

    DBS Awards Nine Social Enterprises

    Nine do-gooder firms in Asia are taking home nearly $1 million (S$1.3 million) under this year’s DBS Foundation Social Enterprise Grant Programme.

    Three of this year’s winners hailed from Singapore: NamZ, a food science startup; reach52, which uses apps to collect health data from under-served rural communities and hook them up with care providers; and Agape Connecting People, which finds work for people with disabilities, single mothers, prisoners and other disadvantaged job seekers.

    From empowering the disadvantaged and marginalized, to creating nutritious food that benefits both the environment and smallholder farmers, we are delighted to support these inspiring social entrepreneurs as they strive to build a better future for all, said Karen Ngui, head of group strategic marketing and communication at DBS in a media statement.

    The DBS Foundation scheme, which was launched in 2015, is open to social enterprises from Singapore, India, Indonesia, Taiwan, Hong Kong, and China.

    Each recipient gets up to S$250,000 to scale up its business operations. The funds can go towards market expansion, a production ramp-up, or other ways to grow the company’s impact on society.

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  • As Chinese Digital Banks Arrive, OCBC Gets Ready

    As Chinese Digital Banks Arrive, OCBC Gets Ready

    When asked if Oversea-Chinese Banking Corp is ready to take on Chinese technology companies looking to take a piece of Singapore’s banking market, the lender’s top executive said they are well-positioned.

    Jack Ma’s Ant Financial Services Group has announced interest in Singapore’s digital banking licenses, but Oversea-Chinese Banking Corp’s (OCBC) chief executive Samuel Tsien is unfazed with the arrival of Chinese technology companies.

    This is because he views these Chinese technology companies as «extended» competition rather than new competition. Moreover, the local lender has its own digital banking plans – it has agreed in principle to join a group led by peer-to-peer lender Validus Capital and Temasek Holdings’ venture-capital arm to apply for a wholesale digital banking license before a year-end deadline, Bloomberg reported this month.

    The bank and its partners are looking to provide a platform to expand in the lucrative South-east Asian market. «We are talking to various parties but we have not made a final decision whether we would go in or not,» said Tsien.

    It’s attractive to us because it’s the way that we can test out in the new digital economy as to what we could do.

    Earlier this year, the Monetary Authority of Singapore (MAS) unveiled plans to grant as many as five virtual bank licenses to boost competition and innovation in the nation’s financial industry. China’s Ant Financial and Ping An Insurance (Group) are among companies considering applications, and Tsien said OCBC may join the race, both as a bank, and through its insurance unit.

    Another reason that OCBC is unfazed is due to high regulatory hurdles greeting new digital banks. Not only must they do proper Know your customer processes and transaction monitoring, they are also not allowed to offer unrealistic deposit rates just to gain market share, he added.

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  • OCBC Prefers Next Leader To Be From The Inside

    OCBC Prefers Next Leader To Be From The Inside

    The chief of Oversea-Chinese Banking Corp has signaled that he favors internal candidates over external ones to succeed him when the time comes.

    Samuel Tsien, who is in his eighth year as the chief executive officer at Oversea-Chinese Banking Corp (OCBC), wants someone familiar with various parts of the bank to lead, without giving names.

    We have internal candidates who are strong candidates, who have moved around in different functions, who are able to take over the bank in the event of a need, said Tsien, 65. Singapore’s other lenders are pursuing various tracks for management succession: United Overseas Bank’s boss recently expressed openness to outsiders while DBS Group Holdings wish to groom leaders from within.

    Under Tsien’s leadership, the group has spent meaningfully to grow its footprints in banking and wealth management. In 2014, OCBC spent $5 billion to take over Wing Hang Bank in Hong Kong. Subsequently, it bought the Singapore and Hong Kong wealth operations of Barclays, helping OCBC’s Bank of Singapore become the sixth-largest private bank by assets in Asia excluding China.

    More recently, OCBC was considering a bid for Jakarta-based PT Bank Permata, a move that would have made it Indonesia’s fifth-largest lender by assets. However, the bank walked away after considering Permata a poor fit, people with knowledge of the matter.

    The Shanghai-born leader also has ambitions to further expand in insurance, which OCBC counts as its third pillar alongside banking and wealth management. While its insurance arm – Great Eastern Holdings – is well established in Singapore and Malaysia, Tsien said he sees more room for growth in Indonesia and Greater China.

    Last year, Great Eastern bought PT QBE General Insurance for $28 million in Indonesia, and Tsien said he would look at other opportunities to grow, including acquisitions.

    In Hong Kong, the bank has a 33 percent stake in Hong Kong Life Insurance, which it decided against selling last year. «That operation is quite small. So we are still investing into this corporate but not significantly, as we look for opportunities in this market,» Tsien said.

  • Vietnam tightens consumer loans

    Vietnam tightens consumer loans

    Vietnam has tightened rules on consumer loans, requiring a progressive decline in their ratio in the coming years.

    Cash loans cannot exceed 70 percent of a finance company’s total loans for consumer durables starting 2021, according to a decree issued recently by the State Bank of Vietnam (SBV).

    The ratio will drop to 60 percent in 2022, 50 percent in 2023 and 30 percent in 2024.

    Finance companies can only disburse cash loans for customers without bad debt records with the National Credit Information Center under the central bank. The decree is set to take effect on January 1, 2020.

    Competition has intensified in the consumer loans division as new players enter the market. Vietnam had very few finance companies in 2015, but as of June this year 16 firms had received permission to operate, not counting alternate lending and pay-day loan platforms, SBV data shows.

    FE Credit, the biggest player so far, accounts for 47.3 percent of the market, followed by Home Credit with 16.9 percent and HD Saison with 10.1 percent, according to financial data provider FiinGroup.

    However, finance companies’ revenue growth has been slowing down, from 87.4 percent in 2015 to 15.3 percent last year, it said.

    Outstanding consumer loans amounted to 19.7 percent of Vietnam’s total outstanding last year, up 3 percentage points from 2017, FiinGroup added.

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  • Grab Rolling Out Low-Cost Wealth Products

    Grab Rolling Out Low-Cost Wealth Products

    Grab is looking to tap the trillion-dollar wealth market across South-east Asia by offering low-cost investment products.

    Armed with a huge ambition of seizing South-east Asia’s wealth management market, Grab will first offer simple cash products offering a yield above the small interest derived from cash sitting in banks, said Reuben Lai, senior managing director of Grab Financial Group.

    What we don’t want to do is what typical financial institutions do where they charge 3 percent to 5 percent upfront – it’s a huge put-off. We are going to do away with all these upfront fees and have a pay-as-you-go model in a very transparent way,” said Lai, who was quoted.

    Grab will work with various asset managers and banks to offer cash products by the first half of next year, followed by more complex products later. It will study whether the products are relevant for mass consumers in both pricing and liquidity, he added.

    The firm could also partner or invest in a platform, which could be a regional or global player. As local banks have not been aggressive in pushing exchange-traded funds (ETFs) despite their low-cost nature, Lai believes therein lies opportunities for Grab Financial.

    I don’t think fees (out there) are low, said Lai, even though some banks here have savings plans tied to investments such as ETFs.

    DBS has recently launched ETF products with a flat annual management fee of 0.75 percent without a further sales charge, platform fees and lock-in period.

    To boost the team in its next phase, Grab recently hired Philip Chew, an investment veteran from powerhouse BlackRock, to run Grab’s investment and new business unit.

    It has also hired Leslie Teo, former GIC chief economist, to head up its data science team, with the aim of looking at how to better price financial products, Lai said.

    Grab’s pay-as-you-use models for its consumer finance push gained traction as 70 percent of its drivers in Malaysia have signed on the usage-based insurance sold by Grab’s partner Zhong An Insurance that offers per-day coverage for a daily payment.

    Given the bigger push into wealth and insurance, GrabPay will look to engage the mass affluent in the coming months as well, having become the dominant e-wallet in Singapore, Malaysia and Vietnam, said Ooi Huey Tyng, who manages the GrabPay business in most of Southeast Asia.

    In about 18 months, GrabPay secured e-money licenses in six countries, and now commands the largest total payment value (TPV) in three, she said, while declining to disclose the absolute figures. With the rapid build-out of the GrabPay wallet, the TPV has also more than doubled in the last six months.

    Many people will say: ‘Are you trying to do an Ant Financial?’ And my answer is: ‘China is one country, we are 10 countries’. It’s very, very different. With the one time the partners plug into us, they get access to our 170 million subscriber base in South-east Asia… and the licenses that we’ve acquired,»said Lai.

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  • DBS Acquires 40,000 Clients in Hyderabad

    DBS Acquires 40,000 Clients in Hyderabad

    Singapore bank DBS acquired 40,000 clients in Hyderabad after just opening its office earlier this year with plans to accelerate growth through new customer touchpoints.

    After launching just six months ago, clients from the Hyderabad now make up for 30 percent of DBS India’s customer base. When compared to other geographies in the Indian market, Hyderabad’s new accounts boasted especially high balances with a quarter of its wealth management clients being non-resident Indians.

    We will continue to invest where we believe the market provides an opportunity,» said Priyashis Das, head branch banking & wealth management, consumer banking, India, in a local media report. Hyderabad has a great opportunity for us.

    Moving forward, DBS will seek to further its growth in Hyderabad with plans to establish 100 customer touch points in the next 12 to 18 months through a combination of branches and e-kiosks across 25 cities. In addition to direct client acquisition, DBS will also invest in improving client experience by opening an experience center in local hub Waverock.

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  • ICE Bitcoin Futures Slated for December Launch

    ICE Bitcoin Futures Slated for December Launch

    Atlanta-based Intercontinental Exchange (ICE) is planning to launch bitcoin futures on December 9 in Singapore, following regulator’s new papers permitting the trading of derivatives tracking certain cryptocurrencies.

    The Bakkt bitcoin cash-settled monthly futures contract, denominated in U.S. dollars, will be settled against data from physically delivered Bakkt bitcoin monthly futures contract. The new contract will be listed on ICE Futures Singapore and cleared by ICE Clear Singapore.

    «Our new cash-settled futures contract will offer investors in Asia and around the world a convenient, capital-efficient way to gain or hedge exposure in bitcoin markets,» said Lucas Schmeddes, president and chief operating officer of ICE Futures and Clear Singapore.

    ICE Futures is the first of four exchanges approved by the Monetary Authority of Singapore to launch regulated futures contracts for payment tokens like bitcoin. This follows a recent MAS consultation paper green lighting crypto-linked derivatives driven in part by observed intuitional demand for a regulated product.

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  • Standard Chartered Wants to Attract 7,000 Millennials in Singapore

    Standard Chartered Wants to Attract 7,000 Millennials in Singapore

    Standard Chartered attracted 7,000 millennials to open new accounts with its «JumpStart» offering which targets the youth segment with a focus on low fees and thresholds.

    The JumpStart savings account offering was soft-launched just two months ago and specifically targeted young customers between 18 and 26 years old. With no minimum deposit, no fall-below fee and no lock-in period, customers were able to secure an interest rate of 2 percent for their first S$20,000 ($14,681).

    In addition, JumpStart customers were offered a debit card with 1 percent cash back on spending, capped at $44 per month, and 100 percent rebates for the fees linked to the first $14,681 in investments through online trading and unit trusts.

    According to research commissioned by Standard Chartered, millennials were «mostly incognizant with banking products and services due to the lack of knowledge and funds. But over the next five years, key priorities included securing a stable job and planning for homeownership and marriage, both of which require intensive saving rates for the average Singaporean.

    Savings form the foundation of financial well-being, and we wanted to give young millennials a good reason and provide a great platform to start building healthy financial habits, said Dwaipayan Sadhu, Standard Chartered’s Singapore head of retail banking Singapore, adding that initial response to JumpStart has been overwhelming.

    This is an exciting start and we have plans to further broaden Jumpstart to cover other areas that are meaningful to this segment, such as financial seminars and giving back to society.