Are Traditional Banks Shrinking Their Footprint In Singapore?

A series of recent deals in Singapore’s banking sector suggests traditional banks may be rethinking how much of the financial services ecosystem they need to own.

In July 2026, Allianz agreed to acquire HSBC Life Singapore for $2.7 billion. HSBC Life itself includes the former AXA Singapore business, which HSBC acquired in 2022. Soon after, Allianz Global Investors also agreed to acquire UOB Asset Management for $555 million. Meanwhile, Standard Chartered is deepening its relationship with Trust Bank, the digital bank backed by Standard Chartered and FairPrice Group. Some of Standard Chartered’s unsecured retail lending relationships in Singapore will be transferred to Trust from September 2026.

Individually, these may look like separate corporate transactions. Together, however, they raise a bigger question: are traditional banks starting to reduce the parts of their business they directly own and operate?

Banks Do Not Necessarily Need To Own Every Product They Sell

Traditionally, banks have expanded beyond deposits and loans into businesses such as insurance, asset management and wealth management.

The reason for this is simple. A customer who already has a savings account, mortgage or credit card with a bank can also be offered other products such as insurance and investments. If the bank owns the insurer or asset manager making those products, it can capture a larger share of the value generated from that customer relationship.

However, it’s not necessary for the bank to own every product that it sells to customers. For example, DBS offers insurance products from Manulife through a bancassurance partnership, where a bank distributes insurance products to its customers without owning the insurer itself. This 15-year partnership was worth an initial US$1.2 billion, with additional payments tied to performance.

Banks May Prefer To Focus More On Distribution And Customer Relationships

Instead of owning an insurer or asset management firm, businesses that need their own scale, expertise and investment capabilities may choose to focus on areas where they have a stronger natural advantage: distribution and customer relationships.

UOB, for example, has described its approach as “open architecture”. In simple terms, this means offering customers products from a wider range of providers rather than relying mainly on products manufactured within the banking group.

For customers, the banking relationship can remain largely unchanged even if the company behind the product changes. A customer choosing between a Great Eastern insurance policy through OCBC and a Manulife policy through DBS is unlikely to make that decision solely based on the fact that Great Eastern is part of the OCBC Group. Factors such as coverage, premiums, product suitability and the banking relationship are likely to matter more.

DBS itself has also shown that such partnerships can change over time, switching from Aviva to Manulife as its insurance partner in 2015. This reinforces the idea that the bank can retain the customer relationship and distribution channel even when the product provider changes.

Traditional Banks May Be Becoming More Focused, Not Smaller

For the most part, many of these changes may be invisible to us as consumers. If you log in to your internet banking, you will still be able to buy insurance even if the insurer is no longer owned by the bank. You can still invest through your bank even if the fund manager sits outside the banking group. And you can, of course, continue to borrow, deposit or apply for other banking products.

In the past, scale for a bank could mean having more branches and owning more financial businesses. Today, however, it may mean having strong customer relationships, a good digital platform and access to the right products, regardless of who actually manufactures them.

This may also explain why banks are placing greater emphasis on wealth management.

Wealth management goes beyond simply selling an investment product. It involves helping customers manage a broader pool of assets across investments, retirement planning, insurance and estate planning.

This is particularly relevant as Singapore banks increasingly compete for wealth management customers, where the bank’s value lies less in manufacturing every product itself and more in advising customers and giving them access to suitable products from different providers.

For banks, this can be attractive because wealth management is built heavily around trust, advice and long-term customer relationships, areas where established banks already have a natural advantage. Wealthier customers may also hold larger deposits, invest more and use a wider range of financial services.

Instead of trying to manufacture every insurance policy or investment fund in-house, banks may prefer to focus on advising customers and distributing products from specialist providers.

In that sense, traditional banks may not necessarily be getting smaller. They may simply be becoming more focused on the parts of banking where their customer relationships are most valuable.

Read Also: From StanChart To Trust Bank: What Happens If Your Banking Product Gets Transferred To Another Bank?

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