Our retail banking products and services are designed to help our customers – from Personal Banking, Wealth Banking and Privilege Banking to Privilege Reserve and UOB Private Bank – plan, grow and protect their wealth and support their lifestyle needs as well.

Drawing on our understanding of our customers’ financial needs, we provide a comprehensive range of products and services, from savings and investment solutions to personal loans and mortgages. We also offer solutions on capital investment, trade financing and foreign exchange for small businesses.

We harness digital technology and data analytics to make our customers’ banking experience simple, secure and widely accessible, such as by providing convenient payment options that suit their lifestyle needs.

In 2016, increasing middle class affluence continued to be the core growth driver for the Group Retail business. Our overall revenue registered an 8.5 per cent year-on-year growth as we remained committed to providing our customers with tailored financial solutions and wealth advisory services. We stayed prudent in managing our expenses and lowered expense growth from 9.3 per cent to 2.2 per cent in 2016. As a result, we maintained our cost-to-income ratio at 50 per cent and recorded return on assets (ROA) at 1.37 per cent. Our higher fee income and larger client base also led to a 16 per cent increase in the total operating profit contribution of the retail business to the Group.

From our Personal Banking customers, we continued to see stable and active current and saving account balances as well as active credit card use, especially through our UOB One Account and credit card solution. In particular, we have seen more than $2 billion in deposits since the launch of the One Account in Singapore in 2015. Overall, our total retail deposit base strengthened by nine per cent compared with the previous year.

Given the ease and convenience that digital banking enables, we are encouraging more of our customers to sign up for online and mobile banking. In 2016, our Group-wide online banking penetration rate was 53 per cent. In Singapore it was 88 per cent. To enhance the user experience and to make applications easier, we also tapped data analytics to simplify the fields required for online forms. This contributed to a 32 per cent increase in the total number of online submissions for our unsecured products. Our regional cards and unsecured loans also grew nearly 10 per cent in terms of billings. This has outpaced the average market growth in the four markets in which we have a cards presence, namely Indonesia, Malaysia, Singapore and Thailand.

In wealth management, our total assets under management as at the end of 2016 were $93 billion, up 9.4 per cent from a year ago.

Business Banking’s operating profit continued to grow strongly, by 20 per cent in 2016. It remains one of the fastest-growing business units within the UOB Group and is a significant contributor to the Group Retail business. Our ROA also improved to 2.58 per cent as a result of our prudent cost management and sustained improvement in sales productivity. We continued to see a healthy contribution of 40 per cent in operating profit from our key overseas markets, namely Indonesia, Malaysia and Thailand, as we strengthened support of our customers across the region. Our growing customer base and strong product propositions, such as the BizTransact current account across the region and BizSmart in Singapore, also led to increased deposits in Business Banking accounts.

With the uncertain economic and market outlook for 2017, we will continue to help our customers save for their future and grow their wealth by investing wisely.

In 2016, the Monetary Authority of Singapore launched the “Regulatory Sandbox” Guidelines for FinTech Experiments and the Financial Sector Technology and Innovation-Proof of Concept Scheme. These initiatives encourage firms to experiment with promising innovation on a limited scale and to accelerate the development of innovative technologies within the financial services sector in Singapore. We will tap on these initiatives to develop and to introduce more innovative banking solutions relevant to our customers’ banking and lifestyle needs.

A key industry development in 2017 will be the implementation of the Central Addressing Scheme in Singapore. This will enable faster and simpler funds transfers using only a recipient’s mobile number, National Registration Identity Card number or Unique Entity Number. With our digital capabilities and regional core operating platform, UOB is well-positioned to roll out more of such innovative products and services to our customers in Singapore and the region.

Providing Contactless Solutions that Fit Consumers’ Fast-Changing Lifestyles

We have sharpened our focus on mobile banking and payment solutions given how indispensable the smartphone has become to our customers. We see how it shapes their expectations, changes their preferences and influences their lifestyles. In 2016, we continued to build on the programmes we have for our customers to access simply and securely a host of services through their smartphones at their convenience.

With Apple Pay and UOB Mighty, UOB cardmembers can make mobile contactless payments through either their iOS or Android devices.

UOB is developing a robust contactless ecosystem to make banking and payments hassle-free and intuitive for our customers. We began our contactless journey in 2007 when we introduced Singapore’s first contactless card, the UOB One Card. In 2015, UOB again led the industry when we launched UOB Mighty, Singapore’s first all-in-one mobile banking app that combines banking services, contactless payments, and dining and rewards features. The launch of Apple Pay in 2016 meant that UOB cardmembers were the first in the country to be able to make mobile contactless payments through either their iOS or Android devices. Since the launch of UOB Mighty, we have seen monthly mobile contactless payments made on UOB cards grow by more than 20 times.

In 2016, we stretched our leadership position in contactless banking solutions in Singapore. Building on UOB Mighty, we introduced two market-firsts – instant digital credit card issuance and cash withdrawal from contactless ATMs. With instant digital credit card issuance, existing UOB credit cardmembers can apply for, receive and use any UOB credit card through the Mighty app in minutes. They no longer need to wait for days for a physical card to arrive in the mail. This means our customers can take advantage of promotions specific to the credit card on the spot, or obtain a new card in minutes if they have misplaced theirs.

As digital cards use tokenised security, which is a method of encrypting a customer’s card payment data on the mobile device to protect sensitive card information, it is safer for customers and reduces the risk of stolen credit cards. In addition to customer convenience, the use of digital credit cards also helps to reduce the number of plastic cards, thereby decreasing the associated impact on the environment.

Through our 38 NFC contactless ATMs in Singapore, Southeast Asia’s first such ATMs, our customers can withdraw cash simply with the tap of their smartphones. The service also helps to reduce the number of physical cards carried in their wallets. Customers with MasterCard credit and debit cards on Apple Pay were the first to enjoy this service, followed by Android phone users. We will replace all current ATMs with new machines enabled with NFC contactless capabilities.

In 2016, UOB also became the first bank in Singapore to enable customers to use their smartphone as their digital security token with the launch of UOB Mighty Secure, which was added as a new feature to our UOB Mighty app. UOB Mighty Secure ensures the necessary additional layer of security traditionally provided by physical tokens for conducting certain banking transactions. With UOB Mighty Secure, customers can enjoy mobile banking without having to toggle between their physical token and their smartphone.

The contactless ecosystem we are building for the convenience of our customers requires adoption and a strong acceptance network. In 2016, we continued to increase the number of our contactless payment acceptance points, which included payment for petrol and purchase of groceries at Dairy Farm Singapore Group’s more than 260 outlets islandwide. We added more than 4,000 new contactless point-of-sale (POS) terminals, taking our total number of such terminals to 5,723 in Singapore. In addition, we aim to lift the $100 transaction limit on mobile contactless payments at all UOB POS terminals islandwide by the end of 2017 to enable our customers to pay for larger ticket items.

We offer a myriad contactless payment options to meet our customers’ needs, including transit.

We also introduced contactless payment acceptance in transit, offering commuters the option of topping up their Contactless e-Purse Application, or CEPAS, cards with a tap of their card or smartphone at the General Ticketing Machines at all Singapore’s Mass Rapid Transit stations.

As a result of our efforts, contactless payments made on UOB cards grew by 100 per cent year-on-year. We expect that mobile contactless payments will account for one in five transactions made on all UOB credit and debit cards by 2020.

Helping Customers Safeguard Their Assets and Achieve Greater Investment Yields

With the continued low interest rate environment, our customers are looking for products that can help them extract the most value from their money. This is why we launched the UOB One Account in 2015 to enable our customers to earn more on their deposits. Based on the frequency of their transactions, customers can enjoy interest rates ranging from 1.5 per cent to 3.33 per cent per annum on the first $50,000 in their One Account. To enable our customers to enjoy the benefits of the One Account and those of a UOB credit card that best meet their lifestyle needs, we opened the credit card eligibility from the UOB One card to all UOB credit cards. This helped to contribute to the doubling of the balances of active deposits in UOB One Accounts in 2016.

The UOB Income Builder, which was launched in 2014, remains popular among our customers as they look for a holistic approach to investing and to hedge against market volatility. The UOB Income Builder helps customers to build passive income through a solution that provides consumers with a ‘moderate risk, moderate returns’ investment strategy to complement their cash savings. Actively managed and overseen by professional fund managers, the funds under the UOB Income Builder invest across geographies and asset classes such that no single component can significantly impact performance. In 2016, we added more funds to the UOB Income Builder suite to provide customers with more choices. The number of customers investing through the UOB Income Builder increased by 30.9 per cent in 2016, while assets under management rose 24.0 per cent from the year before.

Helping Millennials Save and Invest for the Long Term

In 2016, we continued to expand the depth and range of our card products to match our customers’ lifestyle needs across their different life stages. To meet the lifestyle demands of millennials, we launched our first millennial-focused credit card, the UOB YOLO, in Singapore and Malaysia. This new card features Southeast Asia’s first “quick-read” design which has the card number laid out in a 4-by-4 stack on the top right hand corner of the card instead of in a horizontal line. This card face makes it easier for our customers to read the numbers when they conduct online transactions.

For parents with young children, we launched the UOB KidSmart programme, designed to help parents identify their children’s natural talents so that they can plan and prepare for their child’s future. Its two-step approach starts with discovering a child’s abilities with the MIDAS^TM assessment. Using the test results and a UOB KidSmart programme guide that provides a detailed explanation of the child’s natural talents and different learning patterns, we help parents plan, invest and save for their child’s education needs and interests with our suite of financial solutions.

In 2016, we developed a range of solutions, from the UOB YOLO credit card to the UOB KidSmart programme, to meet the savings and investment needs of millennials.

Delighting Our Customers with Rewards and Rebates

To satisfy their increasing desire for intra-regional travel and to help our customers stretch their travel dollar, we introduced the UOB Privileges Passport programme. The regional rewards programme offers our cardmembers access to exclusive local benefits when they travel in Singapore, Indonesia, Malaysia and Thailand. For example, through partnerships with premier brands such as Bangkok’s Siam Paragon, Siam Centre and EM District, a Singapore cardmember can enjoy the same benefits and rewards available on a Thai-issued UOB credit card. We also partnered with established names in the travel sector such as Singapore Airlines and Kaligo in our first region-wide travel campaign at the end of 2016 to help customers derive more value out of their shopping and travelling during the festive season.

For the contemporary women of Singapore, we revamped our suite of Lady’s Cards. The refreshed card face, by acclaimed designer Vivienne Tam, is the latest generation of UOB Lady’s cards and Singapore’s first and only designer credit card. The card suite enhancement also includes a new UOB Lady’s Debit card.

Asian Perspectives for Managing Wealth

Our approach to managing our customers’ wealth is based on a deep understanding of their current and long-term financial needs, risk appetites and lifestyles. With our customers’ interests at the core of our wealth management philosophy, our approach follows three key principles:

1. Understanding our clients’ needs and aspirations;
2. Ensuring that our clients understand the risks associated with their investments; and
3. Helping our clients to prioritise their goals.

Keeping in mind the family, business and lifestyle needs of our Wealth Banking, Privilege Banking, Privilege Reserve and Private Bank clients, we offer thoughtful financial advice and tailored solutions for them.

In 2016, we introduced to our Privilege Banking customers a new investment approach, ‘Smart Risk’, which guides clients to meet their basic investment needs before making tactical investments that could be of a higher risk. This approach is coupled with our investment methodology that was designed to match the solutions with our clients’ financial goals, investment objectives and risk appetites.

Growing Wealth and Preserving it for the Next Generation

UOB’s Private Bank is dedicated to managing the wealth of high-net-worth individuals with $5 million and above of investment assets. We help our Private Bank customers to grow and to preserve their wealth through generations. Drawing on the Group’s comprehensive suite of personal, business and investment services, we develop sound investment strategies and market analysis, and tailored products and solutions as part of our one-bank approach to meet the financial objectives of our clients.

To meet the rising demand for wealth management advisory services, we strengthened our capabilities with the launch of our Discretionary Portfolio Management service.

We advise our clients to be guided by three principles. First, to ensure that their investment portfolios are resilient to various economic scenarios and uncertainties, clients should diversify and invest across various asset classes. Second, as it is often difficult to predict market movements, they could adopt a dollar-cost averaging strategy or a valuation-driven approach with a mid- to long-term view. Third, clients should consider investing in higher quality assets that could stand the test of time and avoid low-quality speculative-driven investments.

Hiring the best and brightest talent with the right skillsets and values is crucial to serve the needs of our clients. During the year, we expanded our talent pool with the hire of 18 highly-experienced private bankers. We also set up a dedicated alternative investment solutions team and grew our wealth planning team.

Helping Small Businesses Increase Productivity and Manage Costs

At UOB Business Banking, we have a deep understanding of the opportunities and challenges that small businesses face and the support they require. Our integrated products and services are targeted at helping them as they progress through different stages of growth. For example, the UOB eBusiness Account bundle enables entrepreneurs who are in the early years of establishing their business to enjoy full rebates on bulk payroll transaction charges via UOB Business Internet Banking Plus or BIBPlus.

To help increase small businesses’ operating efficiency, which is crucial for their productivity, and to maximise their bottom line, we are also helping them to become more efficient and competitive through digital technology and automation.

In 2016, we launched BizSmart, a cloud-based integrated business solution, to help these companies be more productive. BizSmart helps them automate their business processes such as inventory management, employee scheduling and leave, payroll automation, accounting and security for data protection on a single digital platform. With BizSmart, small businesses can benefit from cost savings of up to 60 per cent, as compared with using multiple software programmes which cost more when purchased individually. It is also the only solution that gives small businesses a direct feed from their operating accounts with UOB, enabling them to reconcile transactions, such as purchase orders to suppliers and daily takings, with their bank statement in one simple click, on a daily basis. More than 200 small businesses in Singapore have benefitted from BizSmart since its launch in August 2016.

In a tight credit environment, cash flow remains a key concern for many small businesses. Understanding that many of these companies may need working capital to fund their businesses, we provided more than $1.8 billion in loans to nearly 8,500 small businesses in Singapore and Malaysia. We also enhanced our offering in Singapore by bundling our collateral-free working capital loan, UOB BizMoney, with the SME Working Capital Loan, a government assistance funding scheme for SMEs that is administered by SPRING Singapore. The enhanced BizMoney package allows higher loan quantum of up to $650,000 and flexible repayment period of up to five years without any collateral requirement.

Rising business costs remain as one of the biggest challenges small businesses face. To help our customers manage their costs, we signed an agreement with cloudBuy, a global provider of cloud-based e-commerce and business-to-business solutions, to create a virtual marketplace, BizExchange, for launch in 2017. Through BizExchange, our customers will be able to view and to purchase online a wide range of business essentials, such as travel, stationery, general insurance, as well as courier and logistics services. They also enjoy cost savings from bulk-purchase deals negotiated by the Bank with suppliers. BizExchange will be launched first in Singapore and subsequently in Thailand, Malaysia and Indonesia.

Helping SMEs Expand Across Borders

As small businesses navigate a subdued economic growth environment, we expect more of our customers to expand overseas and to find new markets for their products and services. To support their ambitions, we introduced several initiatives to help our customers as they seize these opportunities. Since 2015, we have been partnering Google, SPRING Singapore, International Enterprise Singapore and other industry players on Go Global, an initiative to help Singapore’s SMEs to expand their businesses internationally. Go Global is a web-based learning platform to help SMEs understand international trade and industry best practices and how they can apply the lessons they learn to their business. As part of this initiative, our senior bankers and economists also engage with these companies and share their insights at workshops.

Enhancing Our Business Bankers to Serve SMEs’ Needs Better

In 2016, we reinforced our commitment to serve the needs of our SME customers across the region. We worked with the Asian Banking School in Malaysia and Institut Teknologi Bandung (ITB) in Indonesia to introduce the finance industry’s first tertiary education programme designed for small business bankers. The programme will deepen the expertise of our bankers in the areas of financial management, credit knowledge and trade to provide specialist advisory services to support the cross-border demands of small businesses.

The industry partnerships add to the UOB-Singapore Management University (SMU) Banker’s Executive Certificate programme, which is the first executive certification programme for business bankers in Singapore. In 2016, a total of 125 participants graduated from these programmes.

UOB collaborates with tertiary institutions such as the Asian Banking School in Malaysia to deepen the expertise of our business bankers across the region.

During the year, our business bankers also provided consultancy sessions to SMEs on how they could grow and build their business. We held monthly business seminars and business coaching sessions in partnership with ITB in the Indonesian cities of Bandung, Jakarta and Semarang, as well as in Singapore with SPRING Singapore. These efforts are part of our Customer-Centric Seminars initiative, under which in 2016, we engaged more than 200 SMEs across the region, providing them with business consulting, research and industry insights.