Here's how DBS' digitalisation boosts profitability

The expansion in India and Indonesia will cause CAGR to increase by 20%.

DBS recently launched new distribution models in India and Indonesia as part of its effort to go full-on digital.

According to RHB Research, expanded presence in these new growth markets are likely to increase compound annual growth rate (CAGR) by 20% in the future from its current 4% contribution to income.

Additionally, DBS has rolled out efforts to pre-empt disruptors in Singapore and Hong Kong by rapidly transforming to digital models. This space has the potential to account for 50% of the bank’s income in five years time, said analyst Leng Seng Choon.

Leng also noted that the bank’s efforts for digital architecture as it aims for 93% cloud architecture by 2019 is an efficient cost-savings method.

The temporary slowdown on operating expenses due to capital expenditure on cloud infrastructure is likely to yield to stronger net profit forecasts by 2% for the next two years, Leng added.

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