DBS Bank, which may become the first foreign bank to set up an Indian subsidiary, plans to attract customers through fintech firms rather than spending much on physical infrastructure.
But the bank is not looking at buying strategic stake in such firms or payment apps in India at this point of time like it did in Singapore, chief executive Piyush Gupta told ET.
It has inked tie-ups with cabs aggregator Ola and financial products market place Paisabazaar in India and looks to take a few more on board for customer acquisition, deputy group head for consumer banking Pearlyn Phau said.
“We are open to exploring opportunities for strategic stakes in fintech companies,” Phau said. “But there’s no active plan at present.”
The bank has invested in Carousell, an online payment app in Singapore, to offer financial products and payment services on its platform in the sovereign city-state.
In India, it is busy in converting itself as a banking subsidiary, and is expecting the final licence from the Reserve Bank of India in a month or two to set up the wholly-owned unit.
RBI allowed foreign banks to set up subsidiaries in 2013. Operating as a subsidiary would remove the restrictions in business expansion in India including the one that pertains to opening of branches. As spending on physical infrastructure is costlier than digital mode of expansion, DBS Bank plans to take its branch count to merely 50 from 12 now over the next year. State Bank of India, India’s largest lender, has over 22,000 branches.
DBS, Singapore’s largest lender by assets, will be targeting India’s 36.5 crore affluent and emerging affluent customers through digital channels. At present, it has a skeletal consumer banking business in the country.
The bank plans to offer financial products mostly through smartphones as part of the digital journey.
“We started thinking of ourselves not as a bank, but as a fintech company,” Gupta said. “In India, 100% of our offerings will be through digital platforms.” He said the bank would use data for lending and cross-selling products and build front-to-back digital servicing model using artificial intelligence-enabled chatbot to minimise manual processing.