Digital focus at UOB takes centre stage during crisis

Digital focus at UOB takes centre stage during crisis

The bank and its employees have raised more than B4.54m via a relief fund to aid rural hospitals

"This new normal, to me, relates to our ability and comfort level to do things digitally a lot more than we used to in the past. We need to be more digital and make sure we adapt to the changes in consumer behavior," said Tan Choon Hin, president and chief executive of United Overseas Bank (Thai).

The importance of workplace flexibility, digitalisation and risk diversification are among the key lessons people have learnt over the past several months dealing with the Covid-19 pandemic, according to Tan Choon Hin, president and chief executive of United Overseas Bank (Thai).

"The way I see it, the [pandemic has] significantly accelerated the process of digitalisation," Mr Tan said.

"Before the crisis, we took seeing people in person and having meetings in person for granted. When the pandemic hit, there was a sudden need for us to be able to do everything remotely and virtually," Mr Tan said.

UOB (Thai) adapted quickly to the need to operate virtually and to enable bank's employees to work from home. For many employees, productivity actually increased as they were able to save time on commuting. Working remotely may become part of the "new normal" for UOB (Thai) and other banks in the future.

"This new normal, to me, relates to our ability and comfort level to do things digitally a lot more than we used to in the past. We need to be more digital and make sure we adapt to the changes in consumer behaviour," Mr Tan said.

Digitalisation is something close to UOB (Thai)'s business focus. Launched last year, TMRW, the Bank's digital bank for the digital generation, was the first-of-its-kind mobile-only digital bank in Asean and has garnered numerous awards for its use of artificial intelligence, biometrics, virtual reality gaming and other technologies.

UOB (Thai) is also helping Thai small and medium-sized businesses be better prepared for the future through its Small Business Transformation Programme, which aims to help local companies adopt digital solutions to improve productivity and their online presence.

Guiding customers through the crisis

Mr Tan said the Bank keenly felt its responsibilities in helping its customers weather the current crisis.

While past economic crises were partly born within the financial sector, regulators and governments worldwide are turning to banks now as a key part of the solution in funnelling assistance to companies and consumers alike.

"Governments and regulators recognise that what started out as a health crisis has now also become an economic crisis. And the last thing you want after that is a financial crisis."

Mr Tan credited the Bank of Thailand for being progressive and proactive in helping ensure that banks could continue to play the role of financial intermediary to allow businesses to stay afloat.

UOB has been helping small and medium-sized businesses through loan moratoria aimed at easing cash flow pressures on businesses. The Bank is also assisting larger companies through loan extensions, interest rate reductions or new credit facilities.

For individuals, UOB is helping those in financial distress through similar interest rate reductions or special payment terms.

"Our measures are aimed at reducing [customers'] debt burden," Mr Tan said, adding that UOB (Thai) had actually begun working on these assistance programmes since late last year, in anticipation of increased stress amid the slowing Thai economy.

To help the wider community, UOB (Thai) and its employees have also raised more than 4.54 million baht through the UOB Heartbeat Covid-19 Relief Fund to help provincial hospitals purchase medical equipment in the fight against the virus.

Managing risk through diversification

Overall, Mr Tan said he was cautiously optimistic for Thailand's economic future post-COVID. "Humanity has always prevailed. We will either learn to live with the virus, similar to H1N1, or we will find a vaccine and are able to eradicate it," he said.

"The question is how long will it take? Will it be a six-month or a three-year recovery? Economists are also talking whether the recovery will be 'V', 'U' or 'L'-shaped. But no matter what, the economy will recover."

However, the widespread impact of the pandemic has led to heightened volatility in global markets. Supply chains have also been disrupted as a result of countries closing their borders and imposing travel restrictions in a bid to curb the pandemic. This has highlighted the importance for businesses to diversify their risk by sourcing from different geographies.

Mr Tan said he believes that over the next several years, Southeast Asia will certainly benefit as companies look to diversify their suppliers and production facilities to help mitigate risk, a trend that should benefit Thailand and its businesses.

Remaining steadfast amid changes

As for the 85-year-old UOB Group, Mr Tan said that the pandemic has not affected the bank's core strategy and commitment to Thailand and Southeast Asia, but the experience will certainly result in rethinking of business practices.

"Banks have not been spared [from the pandemic]. Our employees are affected. Our customers are affected. Our operations are affected," Mr Tan said.

Nevertheless, UOB (Thai)'s strong balance sheet and past performance -- the Bank has outperformed its peers over the past five years, with 2019 net profit of 4.56 billion baht -- has given the Bank "more options and flexibility" in adjusting to the crisis environment. These qualities and capabilities will only become more important in the future as the Bank remains steadfast in supporting its customers, whatever market changes there may be, Mr Tan said.

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