SINGAPORE: Oversea Chinese Banking Corp (OCBC), Singapore's second largest lender, has announced a partnership with StarHub, a leading telco, to research product and service development in an increasingly digital economy.

With a budget of around 6 million Singapore dollars (USD $4.4m), the two companies are funding a year-long research project into the ways in which artificial intelligence (AI) and the internet of things (IoT) can improve customer experience, Nikkei Asian Review reported.

OCBC Chief Executive Samuel Tsien told reporters that the partnership is part of a longer term project, “building Singapore’s We Economy”. At its core, the project signals one key shift, from an individual consumption economy to an interdependent economy of “we.”

Crucial to this endeavour, he explained at a launch event on Monday, was the need for business to understand that it is part of a collective whole. This singular business entity has been spurred by the demands of a digital economy, a shift that will require businesses to break down conventional silos if they are to succeed. Both companies want other companies to join the partnership in time.

For the moment, the partnership will trial store-in-store arrangements designed to be mutually beneficial. Within one of OCBC’s branches in the centre of the city, StarHub will establish a retail corner to sell mobiles and services. Conversely, OCBC will receive service footholds in StarHub stores, though the shape of this development is as yet unclear.

While the onset of digital is visible in most industries, telecoms and banking have been particularly vulnerable to disruption. Fintech has worried banks for some time, but the combination of innovative technologies with large, trusted names including Apple, Google, and Alibaba all offering mobile payment.

In Singapore particularly, the threat to traditional providers is increased by the country’s leading lender, DBS Holdings, which has been able to expand digital-only services to India and Indonesia, both massive growth markets.

Elsewhere, Singapore’s central bank is also moving towards a much larger integration of digital technology into payment systems toward the state, which is to say, taxes. The move is believed to reflect the threat to traditional banks and service providers.

Sourced from Nikkei Asian Review, Bloomberg Businessweek