DBS' big boss is losing sleep over this underrated banking threat

The industry could become obsolete, CEO Gupta warns.

For Piyush Gupta, chief of Southeast Asia's largest bank, the biggest threat facing the banking industry is not the risk of bad loans, aggressive competitors or capricious economic cycles. DBS' big boss believes that the industry's largest threat is much simpler--and extremely more pervasive--than any of these things: it's the Internet.

In an interview with SGX, Gupta shared that the digital disruption in finance presents "a clear and present danger" for the banking industry.

“The value chain in finance is increasingly getting disrupted and dislocated. Alibaba, WeChat, Apple, Tencent, Google – these new providers are coming into every part of the business, whether it’s lending, payments or risk management,” Gupta said.

Although digitisation appears to be the only way forward, banks, unlike internet firms, are hampered by their less agile business models.

“If we don’t respond suitably by digitising our own offerings, by re-imagining the customer’s journey, and leveraging new technology to give them a differentiated experience, we are going to die,” he said.

Cybersecurity is also an extremely big threat, with hackers and other unscrupulous characters lurking in the depths of cyberspace.

“We want to digitise everything, but in this business, we are guardians of people’s money. We need to be very careful about cybersecurity as hackers are a big, big issue,” he said.

Despite these fears, Gupta is dead set on tackling DBS' technology challenge.

“If we don’t get this right, we can be completely irrelevant to our clients in the next five to seven years,” he said.