SINGAPORE (Nov 4): As Oversea-Chinese Banking Corp grew to become a leading bank in Singapore and the region, it built a web of associate companies in other industries, including property, engineering, construction, vehicle distribution, electronics manufacturing, food and drinks manufacturing, department stores and insurance.
In a sense, the bank was positioning itself to be at the centre of an ecosystem of businesses and industries. OCBC owned stakes in them and provided the funding to grow the different parts of the ecosystem. And where it made sense, these different components traded with one another. Dividends from these associate companies flowed back to the bank. This was a nice self-reinforcing loop — until the Asian financial crisis spooked the government, which moved to compel the local banks to divest their non-bank-related holdings and concentrate on the core banking business.
Two decades on, the dynamics and composition of the economy have changed, and OCBC is keen to build a different kind of ecosystem. The bank has been actively looking for new partners to help build a closer relationship with its tech-savvy consumers. “It is about the ecosystem play,” says Ching Wei Hong, the bank’s chief operating officer, at a recent media briefing.