SINGAPORE (Sept 5): For Southeast Asia’s largest bank, going digital doesn’t mean tearing down all the bricks and mortar.

“In addition to a fundamentally digital presence, we are beginning to figure you need some points of presence for the time being to create brand credibility and to service the last mile,” DBS Group Holdings Ltd. Chief Executive Officer Piyush Gupta said Thursday.

Gupta, 59, will take that approach to his expansion in Asia, where Singapore-based DBS has been building online banking operations in India and Indonesia. He said he plans to do the same in other markets over the next few years.

“In India we established a subsidiary so we are creating more points of presence,” Gupta said in an interview with Bloomberg Television. “There’s more kiosks, booths, some basic branches. And we already had that in Indonesia.”

DBS and its traditional banking peers face the prospect of more domestic competition from technology firms after Singapore authorities announced plans to award digital banking licenses to non-banks. The U.K. and Hong Kong are among major economies that have allowed virtual lenders.

Gupta said DBS remains open to “bolt-on” acquisitions as part of its strategy of augmenting digital services with a physical presence. The bank’s 2017 purchase of retail and wealth businesses from Australia & New Zealand Banking Group showed that if you take on physical assets and overlay the digital strategy “you can actually create value very quickly,” he said.

As online services expand, DBS has seen foot traffic in its Singapore branches decline 5% annually over the past few years, Gupta said. As a result, he said the bank will likely need fewer outlets in the future, although they won’t disappear completely.

“You still need some branches” to maintain branding and last-mile services, he said. “You certainly don’t need a branch distribution system for sales and engaging with customers at scale."