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The chief executive of DBS Group Holdings Ltd. welcomes increased regulatory scrutiny of fintech companies in China and elsewhere in Asia, saying it will create fairer competition with banks that have been subject to more stringent supervision. .
“Over time, it will begin to have a more level playing field and it will begin to get a commensurate and even regulatory response from all market participants,” CEO Piyush Gupta said in an interview with Bloomberg Television on Thursday.
Read How Jack Ma’s Failed Ant IPO May Boost China’s Banks
Gupta spoke after being asked for his opinion on the suspension of Ant Group Co.’s initial public offering in China as regulators seek to level the competition between fintech giants and traditional banks. Ant and other companies in recent years have increased their financial services on the continent and beyond, including in Southeast Asia, where DBS is the largest lender.
“Our view has been in the past that many technology companies have been able to benefit from arbitration by not having the same regulatory regime and supervisory overhead that banks have,” Gupta said. “And so as we get to that stage, that’s really helpful to us.”
Slow growth
China’s main banking watchdog is redouble the momentum to curb fintech companies like Ant, promising to eliminate monopolistic practices and strengthen risk controls in the industry. Ant and other firms such as Tencent Holdings Ltd. have built dominant positions in online consumer loans and payments over the past decade, free from the oversight applied to traditional finance companies.
Chinese regulators this month outlined new rules to curb rapid growth and leverage in the country’s more than 200 microlenders, putting a high surprise on Ant’s $ 35 billion IPO.
Read how fintech battle pits Singapore’s biggest bank against Chinese giants
Ant, together with Sea Ltd., backed by Tencent, has applied for Singapore’s digital banking licenses, which could pit them against major rivals like DBS. Over the past decade, Gupta has spent billions of dollars updating technology and digitizing DBS in anticipation of increasing competition.
“Where we are today in our core markets, we are reasonably confident that we have what it takes to compete,” said Gupta.
Expansion plans
India’s central bank this week asked DBS’s India unit to take over a capital-hungry lender in the South Asian nation, in a deal that will see DBS India Ltd. inject 25 billion rupees ( $ 336 million) in fresh capital in Lakshmi Vilas Bank Ltd.
Although he declined to comment on the plans due to pending regulatory approval, Gupta said the deal will not affect DBS’s dividend payment. China, India and Indonesia are key regional markets in which the bank is expanding, he said.
In China, DBS recently obtained approval to set up a brokerage firm in which you can own 51%. The bank will partner with “a couple” of local firms, Gupta said. without naming them. The lender is also increasing its presence in the Greater South China Bay area and Hong Kong, and will focus on consumer finance.
Future of work
Like most of the world’s major banks, DBS is also adjusting its policies on workspace and staffing due to the Covid-19 epidemic. All 29,000 DBS employees will be able to work remotely up to 40% of the time to address the changes brought about by the epidemic, the company said this week.
When asked if DBS plans to keep all of its office space and staff in all regions, Gupta said there will be no downsizing program.
“I imagine that in the next 5 to 7 years, our overall real estate footprint will be a little smaller than it is now,” he said. With “the retraining agenda, and then wear and tear when people retire and move on, I think it will be able to get to the staff profile that we need.”
– With the assistance of Anand Menon
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