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about Asia Buzz
Asia Buzz: Which Bank?
Singapore misses the beat on Net banking
By ERIC ELLIS
August
22, 2000
Web posted at 12:30 p.m. Hong Kong time, 12:30 a.m. EDT
It hasn't been a good week for Singapore banks and the Internet. First United Overseas Bank (UOB), one of Singapore's Big Five banks, embarrassed itself by making a royal mess of the IPO for local online sports retailer eWorldofSports.com, or eWOS. Then, customers of the government-owned DBS Bank, an early adherent to online banking, spent a frustrating day last week trying to log on to the site. It simply disappeared.
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Neither event is good enough for the island that so desperately wants
to recast itself as leading Asia into the Information Age -- and do
it in an up-front, transparent manner.
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The story behind today's news from the editors of Asiaweek
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The UOB debacle was particularly disastrous. It discovered very late
into the share offer period for eWOS that less than half of the allocated
shares for the public had been taken up. That's unusual for Singapore,
which usually gobbles up new company issues. And eWOS was a Net company.
Isn't that supposed to be the new hot investment sector?
After the April tech wreck on the NASDAQ, local punters clearly had other ideas and found the EWOS float about as attractive as the plague. So UOB stepped in to give it a bit of a lift, taking up unwanted stock itself to make it appear as the float was oversubscribed. That's not illegal but the problem was the bank didn't adequately inform the market of its actions. EWOS shares slumped on their debut, lots of people lost money and Singapore's self-proclaimed reputation for market transparency suffered. And perhaps more important, the drama didn't do anything for local efforts to fund the emerging technology sector.
DBS Bank's problems were more technical, and less publicly aired. But this is the bank that was amongst the first in Asia to go online -- around 18 months ago -- and thinks of itself as leading edge, regionally. It might've been quick (for Asia) out of the Net gates but DBS -- and Singapore -- have lost the advantage in Net banking. The leaders now are HSBC and Citibank, both relatively slow to offer online banking but now debuting products that leap to the top slots.
Going online is a real dilemma for banks. We as customers increasingly demand services like the ability to check balances and send money from anywhere in the world. But for banks, it's an expensive business simply installing and adapting systems, and few are yet to see real profits and returns from making that investment.
One tactic in this market is to be defensive because customers can be fickle. I used to bank with HSBC but changed to DBS because it had an online presence, which meant I could pay my Singapore gas bill while in deepest, darkest Wuhan, China. Then I returned to HSBC, because DBS didn't let me transfer money to an Australian mortgage without physically going to a branch and filling out lots of boring forms. When HSBC rolled out its online service, I could suddenly do that. Apparently HSBC was swamped by demand -- an Old Economy bank reinventing itself.
Net banking services are essential in Asia, where so much of the economy is about offshore trade. And for my modest requirements I changed -- back, as it happens -- to where the action is. DBS and its compatriot banks are planning to roll out catch-up-and-surpass services, but I doubt I'll be changing back again. And I bet there are a lot of customers like me.
Eric Ellis is the Southeast Asia and Technology Editor of the regional
finance portal AsiaWise.com
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