Bank of Singapore Write-up

C&D Main Business Activity & Business Concept

Background

Bank of Singapore last year transformed ourselves into Singapore’s first pure Internet Bank with a mandate to aggressively pursue innovative e-Commerce initiatives in the Buyer-Advocate space. Given the freedom to innovate and create its own personality. Bank of Singapore strives to be agile and dynamic in order to be ahead of the market. Bank of Singapore plays a strategic role within the OCBC Group as the “attack” weapon in the war plan to make OCBC a global leading force. The learnings that we derive from implementing the new processes, leading-edge technologies and creative ideas can be adopted by OCBC for its benefit. With this vision, OCBC has committed to invest S$600 million in Bank of Singapore to build, establish and expand Bank of Singapore’s presence.

Our Vision

To be the “Asia’s e-bank focusing on wealth management” for the customer. As the marketplace is over-crowded with brick and mortar banks using the internet as a channel of delivery for mainly transaction capabilities, we set out to differentiate Bank of Singapore as an internet only bank. Therefore, for individual customers, we focus on fulfilling their wealth management needs online and for business customers, apart from the regular banking services, we also provide a wide range of integrated e-commerce service to aid and grow their business. From a buyer’s perspective, this space is currently unoccupied and we believe that customers will benefit from the value of our services. Comprising 2 divisions finatiQ (consumer banking) and finixis (business banking), Bank of Singapore aims to service different segments of the market.

Our Business and Revenue Model

Built on a buyer advocate business model, Bank of Singapore champions the cause of the individual and business customer by understanding their needs and helping them fulfil these needs. This is done by providing innovative, value-added products and services coupled with good pricing and true online fulfilment for 24 by 7 convenience. Compared with a “regular” internet bank, we are different in the following aspects:

*Bank of Singapore*	*Other existing internet banks*
Offers wide range of 3^rd-party products beginning with Unit Trusts	Mostly focuses on offering own bank’s products
Delivers our products mainly through the internet resulting in substantial cost savings	Delivers its products and services through large network of branches which means higher expense
Value pricing in the form of lower transaction fees, higher interest rates and easy access to other on-line business services	Regular pricing
Focuses on wealth management	Offers entire suite of financial products and services
Focuses on being a customer champion by understanding customer needs and providing financial advice and help through banking and non-banking services	Focuses on fulfilling their financial needs by providing mostly proprietary banking products and services Continual customer interaction to understand their needs Providing choice and best value through our buyer advocacy role

The strategies we employ include:

§ Building in-house knowledge of core capabilities for long term differentiation

§ Outsourcing non-core functions

§ Leveraging on leading edge technology as business enabler

§ Building strategic alliances to maximise opportunities

§ Continually enhance customer experience to deepen and broaden relationships

§ Building brand loyalty over time

Our revenues will come from wealth management products, banking products and commerce services. For example, commissions, management fees, trail fees from unit trusts, interest income from loans, revolving credit and subscriptions.

Current Products and Services

Consumer Banking

The first in market with a unique cash management account relationship and straight through processing capabilities for online transactions, we have further enhanced our business with new products and services.

§ First in market to give one of the highest interest rates in town for the investment account.

§ First in market with the largest online stable of unit trusts which has grown from 110 funds by 12 fund managers to now over 160 funds by 18 fund managers.

§ First in market with lowest transaction fees for unit trusts at 50% discount for most funds

§ First in market to launch the innovative fixed deposit product with a pooling feature that gives ordinary investors access to higher rates usually only enjoyed by large investors.

§ First in market with pure online capabilities for CPF Ordinary and Special Account transactions with only 6 easy clicks, no form-filling and paper-free.

§ First in market with an ultra-flexible regular savings plan that enjoys the same low transaction fees

In order to ensure continual improvement in customer experience, we have enhanced our features with the following:

§ inter-bank funds transfer capabilities

§ user-friendly charting tool for in-depth analysis of unit trusts

§ high quality online financial planning tool that analyzes current positions and aids in future planning

Business banking

Finixis, the online business banking and services division of Bank of Singapore was conceived after studying the needs of 150 local enterprises in Singapore. Based on this study of market needs, Finixis was developed to fulfil their requirement for a rich source of information and choice of services they find most valuable. By developing a broad suite of high quality financial and banking services, business solutions and matching customers with suppliers that can best meet their needs, we aim to help local enterprises better manage their businesses.

At launch, we were:

§ First in market with Singapore’s only interest-bearing checking account that imposes no fall below fee as no minimum balance is required. This is essentially an account that comes with free checks and free bill paying services.

§ First in the market to launch our on-line loan and account opening applications

§ First in market to put together a comprehensive suite of ASP services through alliance partnerships

Plans for the future

§ Capability building is an on-going priority as we launch and learn and innovate with new products, services and processes.

§ Invest in deepening and broadening our customer relationships by enhancing the customer experience and integrating services to bring a higher value add to the customer. This will be done by implementing a CRM solution and launching value-added products and services that customers demand.

§ Products and services to be launched under consumer banking include online insurance, revolving credit facilities and secured messaging. Under business banking, credit facilities like business line OD facility, business term loan, business trade financing, ATM services, online cash management services will soon be launched. To add value, a Network Membership Program which supports both banking and non-banking services gives preferential services and rates to corporate customers.

§ Expanding into the Asia-pacific region on a “hub and thin spokes” model will help us reap economies of scale, aiding us in reaching our profitability targets. Built to be rapidly scalable, this model allows for the regional expansion to ride on the capabilities already built for Singapore, thus requiring little further investment.

E. Market Presence and Impact

Bank of Singapore has generated substantial interest since we launched our consumer banking division,finatiQ. During launch, we generated unprecedented awareness and interest. With just one year of operations, over 30,000 users have signed up with us. Coined “Asia’s first true virtual bank”, we offered an alternative way to people’s understanding of “internet bank” and for that, we sparked off lively debates within the financial community! (Talk about impact!)

However, we prevailed, as Bank of Singapore was awarded e-bank of the year 2001 at this year’s prestigious e-Awards. This award was given based on an innovative business model and sound and exciting strategies.

Our Financial Planning Tools also garnered a good rating of “four stars” (out of five) by Financial Planner Magazine. These same tools received good reviews from Business Times too.

Overall, we believe we are on course to building ourselves a brand that is synonymous with high quality, friendly professionalism and innovative & effective financial solutions for the individual and business customer.

F. Profile of 3 members of the management team

PHILIP L SPENCER, CHIEF OPERATING OFFICER

As COO of BoS, Mr Spencer is responsible for developing Bank of Singapore into a globally recognised brand in eFinancial services. He provides leadership in strategy formulation and implementation of business initiatives to advance BoS’ “buyer advocate” business model.

An Associate of the Chartered Institute of Bankers, Mr Spencer brings with him more than 27 years of experience in the banking industry. He joined BoS from HSBC Singapore, where he was Head of Personal Banking from 1999.

Prior to moving to Singapore, Mr Spencer’s last held position in HSBC UK was Yorkshire Area Manager and President of the Institute of Bankers. His banking career started in 1974 when he joined Midland Bank, UK on its Executive Trainee Programme. He gained extensive experience within the Bank including heading up the SME business for London, Corporate relationships, HR and Operations for S E England, rising to the position of UK’s Service Quality Manager when Midland Bank was acquired by HSBC.

DAVID TAN, GENERAL MANAGER & CHIEF FINATIQ

As General Manager and Chief finatiQ, David leads a dynamic team that is dedicated to providing financial solutions that seek to optimise the investment goals of the Asian consumer.

Prior to this, David spent a large part of his career in the banking industry, firstly, as Product Manager for Asian fixed income in JP Morgan, then as Director of Asian fixed income, foreign exchange and derivative sales at UBS Singapore in 1997. His responsibilities included client servicing as well as facilitating the general treasury sales-forces in London, New York, Hong Kong, Singapore, Paris and Tokyo offices.

His earlier working experience included numerous positions in the Singapore Police force and his last role was that of Director of operations in the Ministry of Home Affairs. He was also an honorary aide-de-camp to the President of the Republic of Singapore. David is currently a Superintendent (NS) and Commander (NS) of the Tanglin Police Division.

David holds a Masters degree in Law from Cambridge University and is a barrister-at-law called to the English Bar.

PEARLEEN CHAN, GENERAL MANAGER, FINIXIS

As General Manager of Finixis and CEO of TX123, Pearleen is able to combine the strengths of building communities through TX123 and offering financial banking and other e-commerce services through Finixis as a one-stop centre meeting the total needs of SMEs. To lead in the charge process, Pearleen also directs a team of business process re-engineering experts in studies which streamline workflow processes and operational efficiency through the application of total procurement services.

Prior to this, Pearleen set up Singapore Network Services Pte Ltd which builds electronic information highways. In 1988 it created the world’s first nation-wide EDI network (TradeNet), linking over 20 Government agencies across Singapore into a single point access by the public. Its pioneering work in establishing electronic community systems led to EDI communities for the port, hospitals and clinics, legal sector, construction and real estate, the financial community, manufacturing, distributing and retail.