{"id":3618,"date":"2020-02-13T12:12:03","date_gmt":"2020-02-13T04:12:03","guid":{"rendered":"https:\/\/dollarsandsense.sg\/business\/?p=3618"},"modified":"2021-03-16T16:19:16","modified_gmt":"2021-03-16T08:19:16","slug":"commentary-who-will-disrupt-dbs-ocbc-uob-singapore","status":"publish","type":"post","link":"https:\/\/dollarsandsense.sg\/business\/commentary-who-will-disrupt-dbs-ocbc-uob-singapore\/","title":{"rendered":"Commentary: Who Will Disrupt DBS, OCBC & UOB In Singapore?"},"content":{"rendered":"\n

This commentary was contributed by Timothy Ho, Managing Editor of DollarsAndSense. Drop us a message<\/a> to share your thoughts on entrepreneurship, the Singapore startup scene, or the gig economy<\/em><\/strong>.<\/p>\n\n\n\n

Disruption is a big and commonly used word over the past decade. From entrepreneur networking sessions, startup pitch decks to government outreach programs, you be hard-pressed to have a conversation about business today without someone inevitably bringing up disruption.\u00a0<\/p>\n\n\n\n

Because disruption is synonymous with change, many of us start to overlook just how disruptive <\/em>disruption can be for us. It\u2019s even cited by many with good intent as the reason why we must continue innovating and learning, just like how our parents used to tell us to study hard in order to get a good job. <\/p>\n\n\n\n

But disruption isn\u2019t natural evolvement. It\u2019s largely unpredictable. Often, it\u2019s not even welcomed by certain groups of people.<\/p>\n\n\n\n

Disruption Is Unlikely To Come From Incumbents In The Same Industry<\/h3>\n\n\n\n

During one of our lunchtime conversations, some of us were discussing the topic of disruption in the financial industry. Here\u2019s what I think:<\/p>\n\n\n\n

True disruption for an industry isn\u2019t likely to come from incumbents in the industry.<\/p><\/blockquote>\n\n\n\n

Think about it. Incumbents are companies that have solidified their position after decades of hard work. Most of these companies have done well, offer products and services which their customers are happy\u2026or at least satisfied with. Incumbents want to enjoy improvements over time (because no business should ever be contended with the status quo) but natural evolvement shouldn\u2019t be confused as disruption.<\/p>\n\n\n\n

Technically, incumbents are in the best position to disrupt themselves. They have more money, existing customers, sufficient talent and business partners that they can leverage on to build something different \u2013 but only if they want to.<\/p>\n\n\n\n

The reason why incumbents won\u2019t disrupt themselves is precisely because they are incumbents. There is no financially logical reason to be spending tons of money to be killing off your own profits.<\/p>\n\n\n\n

Just ask yourself this. Would Grab have spent billions of dollars in marketing and product development to acquire drivers and consumers if they started off in Comfort Delgro\u2019s position? <\/p>\n\n\n\n

Effective Disruption Can Easily Come From Existing Incumbents In A Different Industry<\/h3>\n\n\n\n

New markets tend to be created by startups. Social media is an example. While they have now disrupted the advertising world and change the way media companies operate, independently owned media companies were never likely to be the ones building social media businesses.<\/p>\n\n\n\n

But what about the likes of Nokia who were operating in an established, growing market? <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Once a company with a market capitalization of $250 billion, it\u2019s worth noting that Nokia\u2019s valuation actually peaked when the iPhone was first launched. If anything, Nokia should have been in prime position to capitalise on the smartphone boom that was to come.<\/p>\n\n\n\n

They couldn\u2019t do it. Neither could BlackBerry, which was the world\u2019s first innovator of the Smartphone. Nor Motorola, which invented the mobile phone. <\/p>\n\n\n\n

Instead, a good computer company and a leading search engine portal found themselves taking the lion\u2019s share of the market. Sure, Apple and Google were already leaders in their respective space but that\u2019s exactly my point, the biggest potential disruptor in your industry today is more likely to be an incumbent you already know from another industry, than a startup.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

This is why I think it\u2019s worth paying very close attention to some of the potential applicants for the digital bank license in Singapore. This includes Singtel (an established telco company), Grab (a unicorn startup\/super app) and Razer (a leading gaming company). <\/p>\n\n\n\n

These established incumbents from other industries have 1) the funding to pull it off<\/strong>, 2) a market it wants to disrupt without needing to worry about cannibalizing its own sales, <\/strong>3) the capabilities to build a team from scratch like a startup <\/strong>and 4) the right management and control in place so that it can scale up its operation quickly when it wants to.<\/strong><\/p>\n\n\n\n

Regulation At The Cost Of Innovation<\/h3>\n\n\n\n

Similar to healthcare, the banking industry is a tightly regulated industry (for good reasons) and typically that becomes an advantage for incumbents. <\/p>\n\n\n\n

The taxi industry wasn\u2019t regulated much and it was easily disrupted by Uber & Grab<\/p>\n\n\n\n

The travel industry didn\u2019t have to be regulated and some of the biggest players today are AirBnb, Expedia, Skyscanner and Booking.com. <\/p>\n\n\n\n

The book industry didn\u2019t need to be regulated and it produced Amazon, a bookstore which went on to become the most valuable company in the world today. Amazon subsequently went out to disrupt other \u2018bigger\u2019 industries such as groceries, video distribution, commerce and web services.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

If anyone were to disrupt a bank in Singapore, it\u2019s unlikely to be a foreign bank or even a FinTech startup, but likely an established player from another industry.<\/p>\n","protected":false},"excerpt":{"rendered":"Disrupt or be disrupted.\n","protected":false},"author":8,"featured_media":3625,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[364],"tags":[177,158,178,168,262],"yoast_head":"\nCommentary: Who Will Disrupt DBS, OCBC & UOB In Singapore? | DollarsAndSense Business<\/title>\n<meta name=\"description\" content=\"A discussion on whether incumbents in Singapore's banking scene are ripe to be disrupted by new upstarts - or themselves.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/dollarsandsense.sg\/business\/commentary-who-will-disrupt-dbs-ocbc-uob-singapore\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Commentary: Who Will Disrupt DBS, OCBC & UOB In Singapore? 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