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These businesses have succeeded by combining innovation with better customer experiences. Alibaba’s vision is to ‘become more a part of peoples’ lives and ‘fulfil all their needs’. It has moved beyond its core activity of e-commerce to offer digital platforms and mobile apps that enable customers to invest, secure loans, make travel reservations, and consume digital entertainment and news. All these services are supplied by Alibaba’s companies or its partners, and are accessed through Alipay, its payments platform. Alipay is one of the biggest payment companies in the world with over 450m users. It processes 170m transactions daily.
The extensive networks created by Alibaba, Facebook and Google have allowed them to encroach into financial services. These platform providers, not fintech companies, are the biggest competitors to financial institutions.
All is not lost for banks, though. While disruptive technology is a challenge, that discontinuity can be turned into an opportunity. Banks have innate advantages: robust networks and infrastructure, established risk management frameworks, and generally being seen as safer and more trustworthy.
In recognition of this, fintech companies are turning to partnerships with banks so as to benefit from their expertise, capital and networks. In return banks want access to fintech companies’ agility, customer-focus and inventiveness.
DBS has over 280 branches in 18 markets, and is continuing to grow. Harnessing fintech and offering banking through digital channels is enabling it to expand into countries such as China, India and Indonesia without a substantial bricks-and-mortar presence.