UOB plans to launch digital bank in Southeast Asia to target ‘mobile first’ customers

UOB branch at Raffles Place, SingaporeUOB branch at Raffles Place, Singapore

Singapore bank UOB said on Friday that it would launch a digital bank to target “mobile first” and “mobile only” customers in Southeast Asia in a bid to spur growth in its regional customer base.

The digital bank is aiming for a customer base of three million to five million over the next five years, with a steady-state cost-to-income ratio of 35 percent, it said, adding launch details would be announced soon.

The digital bank will use a five-stage business model: Acquire, Transact, Generate data, Insight and Engage (ATGIE), the bank said in an SGX filing before the market open on Friday.

ATGIE will use artificial intelligence, machine learning, data analytics, user interface design and smartphone capabilities, based on UOB’s own digital technology as well as technology developed via its collaboration with fintech partners, including via its joint venture with Avatec.ai and its investment and partnership with Personetics.

The ATGIE model is customer onboarding with a localized interface, and then as customers interact more frequently, the digital bank will develop an understanding of preferences and behaviors, it said.

“Over time, the deeper insights drawn would enable the Bank to anticipate customers’ needs, to determine how it can best help them and prompt them towards smarter spending and saving habits for them to achieve their financial goals,” UOB said. “This in turn would encourage even greater customer engagement, loyalty and advocacy.”

The service is expected to allow UOB to target a broader base of Southeast Asian customers, increasing financial inclusion, including for customers new to credit and those who are underserved, it said.

“We harness our technology, knowledge and experience gained across all markets to provide our customers with relevant, smart, simple and safe solutions wherever they may be,” Wee Ee Cheong, UOB’s deputy chairman and CEO, said in the statement. “The group’s Digital Bank is our latest initiative to deepen engagement with our customers, especially the mobile savvy. It will also help scale up our customer franchise across Southeast Asia and positions us well for the future.”

In a separate SGX filing, UOB reported on Friday that its second-quarter net profit rose 28 percent on-year to a fresh high of S$1.08 billion, above some analysts’ forecasts, amid strong overall operating income.

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