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UOB: ASEAN’s digital bank

Interview - November 11, 2018

UOB is a multinational Singaporean banking institution which provides commercial and corporate banking services, personal financial services, private banking and asset management services, as well as corporate finance, venture capital, investment, and insurance services. In this interview, Susan Hwee talks about the bank’s footprint in ASEAN and how it is embracing technology to better serve its customers.



One of UOB’s key unique differentiators from other financial institutions has been its focus on the region, as it is present in almost all of ASEAN. Why this regional focus?

We recognized early the importance of supporting the region’s growth. That was a very important realization and has influenced our business focus over many years.

If you take the big ASEAN economies, we are present in Vietnam, Thailand, Malaysia, Singapore and Indonesia. In each location we have put in management and made capital investments. Within ASEAN, we have more than 500 branches and offices. That takes a significant commitment. You must spend the time to understand the country, its size and scale, particularly in developing countries such as Thailand and Indonesia where branches are still very important despite the digital economy and mobility.

To be able to support this growth you have to build a strong foundation. UOB is 83 years old now. Over the years, we have grown through organic growth and acquisitions. Our acquisitive phase began in Singapore with Chung Khiaw Bank, followed by Lee Wah Bank, Far Eastern Bank, ICBC Bank and OUB. OUB was our largest acquisition in 2001.

We have had a presence in Indonesia as an overseas branch for almost three decades. We also had the opportunity to take a minority stake in a bank called Bank Buana, which over time became a majority stake. In 2010, we merged our local branch and Bank Buana to form a local subsidiary called UOB Indonesia.

Most recently, we opened our subsidiary in Vietnam. Similar to Indonesia, we had a presence in Vietnam for a long time before opening our subsidiary. We are the only Singapore bank that has been given such an opportunity. We also have a branch in the Philippines.

Building sustainable businesses is based on nurturing relationships and trust. So that ability to connect with business owners is still very important. That’s the slight difference in our footprint vis-à-vis people who say, ‘I have an ASEAN presence’. We have been investing in the region for a long time and are very entrenched.

When SMEs or large national corporations and their SME partners want to expand their presence and operations outside of their home country, we become their “go-to” bank. There is familiarity with UOB as there are people who speak the language. But there is also the familiarity of the terms, the concepts, the products and the way we link the teams to support our client that makes a difference.


ASEAN’s diversity is challenging is terms of different legislations, regulations, cultures etc. The complexity and the lack of integration results in a push towards AEC 2025.To what extent is digital important to UOB to consolidate its presence as the regional bank of ASEAN?

Digital is important because it plays a part in our solutioning and in unifying our platform. The ability to digitalize our services and solutions enables us to connect with customers where they live and conduct business. For example, we can think of our physical limitation or we can think of the mobile device as our branch. From the touch to the talk, across all of our channels, the experience is distinctly UOB.

We also have to consider that this is the first generation of digital bank customers, especially as we launch our digital bank across ASEAN. We have decided to take some of the digital assets that we have and embed them in the digital bank solution. We have taken a stake in one of the Fintechs called Personetics, which has cognitive technologies. Essentially, the technology looks at and learns from your transaction patterns then engages in digital conversation that becomes very important in helping people spend and save more wisely.

Singapore is a great center for experimentation and innovation, but to do serious implementation in ASEAN, you have to go to other markets. How we are choosing to do that is through bringing value to and co-creating with Fintechs.


UOB is very much involved in trying to create the ecosystem for innovation, within Fintech specifically and the FinLab to innovate and boost the startup ecosystem in the region. You have got a partnership with Temasek through InnoVen Capital. What do you believe is your role as one of the largest banks in Southeast Asia to spur that innovation drive both within UOB but also on the co-creation or the promoting side?

Some Fintechs are competitors, others are collaborators. There are a lot of Fintechs that actually create value for a bank. It can be through the technology they have created such as that by Personetics; they bring both technology and ideas through the use of technology, the algorithms, the artificial intelligence, the coding, and the way they look at it.

We also have, a joint venture with Chinese Fintech, PINTEC. They have focused on Fintech, partnering banks but also competing with them through doing credit assessments based on alternative data. When PINTEC came out of China they worked with us because of our experience in the region. One of the first markets on which we want to work together is Indonesia. In Indonesia, data is not uniformly and consistently available which means the cost of processing credit cards is really high.

For example, if I find someone named Mohammed Ali, there are actually many Mohammed Ali’s. If you come from a province in Sulawesi, you have one ID. When you go into Jakarta, you have another ID but could be the same person. How do you know you are then dealing with the same person? The kind of traditional banking data that we have in Singapore, Hong Kong and Thailand, have quite reliable and consistent data. In Indonesia, it is less so. This is why the credit engine that PINTEC has is interesting because they look beyond traditional banking data. They use social data, telco data and so on with permission from the customer to augment data gaps banks will need before they extend credit to someone.

In this digital era, some economies will be able to leapfrog some things using data and digital solutions, but the sheer size of Indonesia, its sheer volume of population, to get data sets consistent will take time. In Singapore, we have MyInfo. I think that kind of digital identity will catch on everywhere just like in some parts of Europe. Singapore is a great centre for experimentation and innovation, but to do serious implementation in ASEAN, you have to go to other markets. How we are choosing to do that is through bringing value to and co-creating with Fintechs.

The FinLab helps us to keep a pulse on what is happening in the market; what ideas are being developed by those who are courageous and have a “brave new world”, forward-thinking mindset. These are the people who are focused on what the new world ought to be and coming up with the ideas to make it happen. For those Fintechs who were chosen for the accelerator programme, we gave them seed money, mentorship and access to our network. The FinLab helps us to anchor our ideas, and to anchor the technology and developments that may be useful and potentially important to us as well.

In the second cycle for instance, there were two companies that caught our eye. One was PayKey. If you go to our mobile banking app, UOB Mighty, we actually have our UOB logo in your social messaging app. When you press the logo, you can pay another person. It’s a seamless experience. PayKey is the Fintech behind this feature.

The second one that we found in our second cycle was a company called Tookitaki. They created a machine learning algorithm to help with anti-money laundering and transaction monitoring. In banking, there are many transactions and processes such as Know Your Customer, and we have to monitor everything. The monitoring could also create a lot of false positives, especially Chinese names. Take Mr. Li; there are lots of Mr. Li’s and lots of permutations of how the name can be presented. All these permutations and combinations that come through can create false positives when we are monitoring transactions. This takes a lot of time and resources.

So we used Tookitaki’s tools to run our data. What we found was that the solution reduced the false positives by more than half. That’s a lot because when you think about the volume of customers we serve. They also picked up and improved the positive correlation by about five per cent, which is also good because the bank is a risk business. How are we able to strengthen the systems to identify suspicious transactions or people so that we can play a part in the community? We are moving beyond proof-of-concept now and helping Tookitaki to commercialize the product. We will obviously be one of their first customers and we want them to be successful because the more they do, the stronger they are, and the better for us too.

For startups, this is where we are - we bring them in through The FinLab. The FinLab has completed its third cycle now. Then we give them some funding and hopefully, we can bring value. But a lot of these companies are in early stages and they will not be able to have access to working capital, but they still need additional funding in order to grow. When they need serious money and funding we bring in InnoVen who will look at their debt and together we can help them grow before they become fully bankable as a name. There are a few such startups in the pipeline and many of them are loyal customers of ours now.

The other approach we have is our partnership with Israeli company OurCrowd. They are really a Fintech in a very different way. It is not the P2P crowdfunding, but what I call digital angel investors. They use digital solutions to connect their investment community together to fund growth and exits. Because of their digital platform and reach, they can start at smaller ticket sizes for angel investors. It is like bringing Silicon Valley globally at a smaller ticket size and “retail-izing” it to accredited investors.

Having that venture created two avenues for us. One is obviously being able to distribute them to our high net worth clients who want to diversify their portfolios. The second one is if OurCrowd is interested in looking at the investment in the Fintechs under The FinLab or technology companies we work with, OurCrowd can invest as equity holders for a while until the company grows. This mirrors the lifecycle of how small businesses get started and grow. But in this instance it is for technology businesses or businesses using technology in a big way.

Combined, these approaches address the different needs of Fintechs as we help them to grow.


After defining the potential of the regional, the importance of digitization, from your expert view as UOB regional bank leader in digitization, why do you believe the story of ASEAN and digitization is important to American stakeholders?

One is the size of the economy. It is sometimes overlooked because we tend to take a look at ASEAN as pockets of countries. In Vietnam: 95 million people. You have in Thailand 69 million people. In Malaysia: 31 million. Indonesia is very big, more than 260 million, and then Singapore. Of course, then there is our connection with China and the amount of intra-regional trade that is being conducted. Each of the economies here, all have different strengths and are in different stages of growth and development. The collective strength of that is what makes ASEAN strong.

Yet ASEAN is a market that requires time to understand and to be appreciated. Actually, if you think about Singapore, the US has a lot investment here. You see a lot of American companies here. I am a beneficiary of that. My first job was with IBM and my second job was CitiBank in Singapore. In that sense, I think the US has been a direct participant in the Singapore story.

But Asia or ASEAN as a region has grown together. The amount of growth from the younger generation and the growing affluence means consumerism will go up. The US can benefit from that too – even as its focuses on its core. We can feel the energy, the vibrancy and the buzz underneath that. All these demands will require goods and services and that's where there is a lot of potential. There may be some rebalancing of trade given US’ current focus but businesses have a way of finding their way around. It’s like water.

We believe strongly that ASEAN will be in the long-term beneficiary of that. I think the US economy and the US businessmen are pragmatic. They have the familiarity with Singapore. I hope UOB will be their choice to serve them in Singapore and ASEAN.


What makes you different against competitors?

The difference is that while we embrace digital, we focus on the customer benefit first. You can’t digitize the customer. Through multiple channels, we can build a relationship. We put the customer at the heart of what we do.

Let me give you an example. We are one of the very few banks, I would say in the world that has a totally correlated data warehouse. This is our third generation of data management infrastructure and we have developed the first two generations over the last 15 years. Of course because of concerns including data privacy, different functions within the bank get playpens to go in and work with the data within the approved governance.

The next wave beyond digital is data. Everyone’s jobs would need to be augmented by some form of machine learning or artificial intelligence. You can think of it as disruption or you can think of it as machine augmentation that makes us a bit more efficient. And you have to learn how to deal with the massive amount of data that comes with that. And by data I don’t mean numbers, it could be text, it could be information.

What we wanted to do is have every single one of our staff be equipped for this transition. We have a training programme to help our people appreciate that while some jobs may be displaced by automation, this automation can help them to be more efficient so that they can spend more time with the customer or to create more value in their roles.

Digitalization is really about understanding the whole layering of both the process chain and the different customer segments. For us, we have to deal from the SMEs who are still traditional, the new generations obviously moving up and wanting to digitalize and be connected to the digital economy, to young customers who will be our future millionaires and billionaires that we want to guide. At this point in time, we also want to be part of their growth story and their aspiration. How do we make sure we have solutions that match? That to me, the technology behind, it is a given.