EXCLUSIVE: “An age-old problem and how to solve it” – Evy Wee, DBS in ‘The Fintech Magazine’

Could the world’s first public/private attempt to give everyone access to all their financial information help Singapore avoid pensioner poverty? Evy Wee, Head of Financial Planning & Personal Investing at DBS believes it’s a big step in the right direction

At night, downtown Singapore hums with the chatter of the affluent. Crisp shirts and clicking heels swagger between Michelin-star eateries and five-star hotels, schmoozing or boozing along the light-strung mouth of Marina Bay. And, watching silently over this nightly carousel of canapés and cocktails are the buildings of the world’s biggest banks, the odd office still glowing with the labour of the late-to-leave.

It’s a scene that epitomises the country. Since achieving independence in 1965, Singapore’s open-door policy towards global financial institutions has generated a colossal amount of wealth. In terms of GDP per capita, the island nation is consistently rubbing shoulders with Luxembourg and Norway, inside the global top 10. Singaporeans earn on average six times more than Malaysians living on the other side of the Johore Strait, and 16 times more than their neighbours in Indonesia.

Despite this, individual Singaporeans know financial hardship. With space on the island at a premium, housing prices are astronomical; the cost of living is high and rising. And, like other mature economies, Singapore is fast approaching its senior moment, with the country’s median age set to rise from 35.6 in 2020 to 53.4 in 2050. It’s a looming problem that Europe knows all too well: a greater burden on the state and young workers, and a rise in old-age poverty. Between 2012 and 2015, poverty in Singapore increased by 43.45 per cent. For the older population, that figure was 74.32 per cent. The country’s retirement policies aren’t helping: the statutory retirement age is 62, and employers routinely coerce older workers into leaving early.

Adequate financial planning, well ahead of Singaporeans’ silver years, could help the country escape a looming crisis. That’s the opinion of Evy Wee, head of financial planning and personal investing at DBS (Development Bank of Singapore). Born in Malaysia, Wee is no stranger to financial hardship herself, having watched her parents’ home taken away from them when she was a teenager.

“I literally just ate carbs for almost every meal during my first three years at DBS,” she says. “That was when I became more disciplined with my money, because we really had a single-minded focus to get the house back. I really learnt the value of money and the importance of saving and gaining financial freedom.”

For many young Singaporeans, financial planning starts and ends with buying an apartment in one of the many high-rises. That’s a feat most only achieve after marriage, when they become eligible for state hand-outs designed to boost the country’s fertility rate and smooth that senescent upward curve. Investing and saving for the long-term, as DBS research found, isn’t on their radar.

“In Singapore, people aren’t underbanked, they’re undeserved, lacking awareness of the need to plan,” says Wee. “And we’ve learned about some blind spots in customers’ behaviour. For example, people would be spending a lot of money trading on a platform, but with a horizon of zero years.

“On the back of Robinhood and Freetrade, many younger consumers, as well as customers who may not have a tonne of money, started investing with us through the digiPortfolio, which we integrated into the bank in 2019. It’s where they can buy equities from different stock exchanges,” says Wee.

Following the launch of those features alone, DBS saw a doubling of customers starting to invest. Today, digiPortfolio is rated in the top three investment apps, after Stashaway and Syfe. It encourages low-risk, long-term investments, which feel neatly opposed to the bullish bravado of in-vogue trading apps.

Wee reckons Singaporeans have significant misconceptions about financial planning: “Many mass market customers have this misunderstanding that planning and investing is something they depend on someone else to do, like a financial planner. The second misconception they have is, ‘I need to have a tonne of money before someone will even entertain what I need.’ We’re here to change all of that.”

Planning Ahead

Having launched mobile banking in 2010, and a digital wallet in 2014, DBS is consistently ahead of the industry’s modernisation trend. But now it’s participating in a world-first: Singapore’s impressively coordinated approach to
open finance, called the SGFinDex, or the Singapore Financial Data Exchange.

SGFinDex doesn’t just share data between banks – it enables Singaporeans to consolidate their financial data in a single place. That’s everything from deposits, cards and investments through to government loans and records. As DBS puts it: “Your money may be in different places, or all over the place, but your financial planning doesn’t have to be.”

The SGFinDex involves eight participating banks with the Monetary Authority of Singapore and the Ministry of Manpower and it harnesses Singapore’s existing national identity infrastructure, the Singpass – citizens’ one-stop gateway for access to 1,700 digital services provided by more than 460 government agencies and businesses.

“The launch of the SGFinDex was a very exciting time for us, for Singapore,” says Wee. “It was our first foray into open banking, and it was meant to help consumers really understand the need to look at a balance sheet more holistically for the purpose of financial planning.”

With all their financial data at their fingertips, it’s hoped that Singaporeans will be empowered to make better decisions about how they spend, save and invest – planning for retirement, or for unforeseeable events like a pandemic. But sometimes users need a nudge. To provide these, DBS has plugged SGFinDex’s power into its existing financial planning service, called NAV Planner, available on its digibank and iWealth apps. According to DBS, that’s supercharged the advice generated by NAV Planner, which was already delivering smart, personalised tips to customers, based on their unique financial profile.

“The whole ability to aggregate data around all the other bank accounts, around investments that may be held outside DBS, has enhanced our ability to provide advice to consumers,” says Wee.

It’s easy to see why: if a DBS customer had $5,000 in their account, but NAV Planner didn’t know about $50,000 sloshing around in another bank, it might treat them as a low earner and provide inaccurate or irrelevant advice. Since its introduction in December 2020, Singapore’s novel approach to open banking and the tools it’s allowed banks to build on top of it has proved wildly popular with customers.

“The feedback is that they’ve loved what the application has brought to the table,” says Wee. “They’ve even asked the industry to add more datasets.”

And so they are. The SGFinDex is soon to upgrade to its second generation, adding further data to the project. That’ll include data from the Singapore Exchange, where Singaporeans custodise their investment holdings. Wee is optimistic that, as the information available to NAV Planner and other tools expands, it will help consumers become more aware of the need to plan and services will become much more intelligent in assisting them.

The Singapore government’s hands-on involvement in the SGFinDex reveals its readiness to be brazen in its response to societal changes, including ageing, as does its creation of MyMoneySense, a free government financial planning app. For DBS, though, the bank’s upgraded NAV Planner is about something more.

“It’s the democratisation of wealth services,” says Wee. “And we hope we’ll be able to take all these best practices, the whole platform, beyond Singapore.”

No doubt some Europeans will yearn for the single-interface access Singaporeans now possess to review their myriad of financial investments, commitments and accounts. But it’s difficult to imagine infrastructure akin to the Singpass washing in the UK. Data privacy concerns regularly force the abandonment of state-led data-sharing schemes, and even vaccine passports have faced firm resistance. But, as with the UK’s open banking initiative, it’s certainly possible for financial institutions to work together on a similar project to the SGFinDex – with government taking a regulatory backseat. In lieu of a Singpass-style identity validator, such a project – or projects – could just as easily partner with third party sovereign ID providers.

Back in Singapore, Wee has worked hard on her own financial planning in order to help her parents buy back their home – and with it, their financial freedom. But with old-age poverty rates rising in one of the world’s wealthiest nations per capita, Singapore can expect more stories like Wee’s – of parents financially debilitated, and offspring working furiously to achieve financial stability. Tools like the DBS NAV Planner won’t stem anxieties about Singapore’s ageing population on their own, but they’re a step in a healthier direction and might just help keep the party going down on Marina Bay.

This article was published in The Fintech Magazine #23, Page 15-16