Financial Service Sector Analysis 2022

Running head: FINANCIAL SERVICE SECTOR
FINANCIAL SERVICE SECTOR
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Author Note:

FINANCIAL SERVICE SECTOR1
Part A (1):
DBS bank has been serving the customers of Singapore since 1968 and considered the
best in the country. Along with serving the market of Singapore, DBS Bank is reached some
of the important markets of the countries of Asia and considered to be the safest bank. The
most important strength of this company is that it can serve the Asian market in Asian way
unlike other banking services. The target group of this bank is the corporate, private and
small and medium companies which needs the financial services and advisory. Along with
this, the company also has a large client base in China, Indonesia and India.
Strengths:
 DBS bank has a strong market position in Hong Kong and Singapore (Dbs.com.sg
2019).
 It has diversified products as well as offerings that help in generating bank’s revenue.
 It has been serving more than 4 million clients in 15 countries like China, India and
Indonesia.
 The dividend of DBS bank is comparatively higher in comparison to sector and
industry scores.
 The company has more than 20 thousand employees working in the branches of Asia
(Dbs.com.sg 2019).
 The customers of DBS bank are served with the new generation internet banking
device that assist to thwart phishing attacks.
 This company has pioneered DBS Hotspot Pre-Accelerator to cultivate
entrepreneurship through perfect experimentation, training and mentorship in
Singapore.
Weakness:

FINANCIAL SERVICE SECTOR2
 DBS bank has highly skewed presence in the Asian market and lowest penetration in
the Americas and Europe.
 The main revenue comes from the consumer banking, asset management and treasury
but other offerings contribute less in the revenue.
Opportunities:
 DBS bank has focussed on the asset management industry that is a positive and
growing interest in the Asia countries.
 In Asia pacific region, the company will be able to capture the growing demand of
retail savings and investments
 The developing countries of Asia are creating opportunities for the bank and in most
of the cases DBS bank is trying to enter the markets through acquisition process.
Threats:
 Despite the fact that the Asian market is gradually growing giving the bank
opportunity to enter and conduct business, there is an uncertainty in both the Asian as
well as world financial market.
 The competitors like HSBS, CBCL or Chinese Banking Corporation Limited and
Standard Chartered bank are pressing the company to push limit as much as possible.
 Along with the banks of china, the American and European banks are grabbing the
opportunities of the Asian markets.
 The liquidity regulations can affect the operation of DBS bank.
Key issues:
 The bank is facing issue of high competition and the bargaining power of the
customers.
 The digitalisation process of the company is much slower than demanded

FINANCIAL SERVICE SECTOR3
 The creation of new products are not being done in DBS bank
 The bank is not being able to incorporate rapid innovation in the payments as well as
wider transformation in the systems.
Part A (2):
From the above analysis of the situation of DBS Bank and its operation, it has been
understood that the management needs to understand the position of the firm on the
perspective of porter’s generic competitive strategies. A company’s relative position within
its industry actually determines whether its profitability is above the industry average or
below. The important basis of above the average profitability in long run gives a sustainable
competitive advantage (Abdolshah, Moghimi and Khatibi 2018). Despite the company has a
large number of competitive advantage similar to its competitors but there are two aspects
that the firm can utilise to overcome the competition completely.
These are low cost and differentiation process. These two competitive advantages get
full support by another strategy like ‘focus’ for achieving average performance in industry.
Differential and cost leadership strategies aim at competitive advantage in wider range of
industry segments and the focus strategies actually target the cost advantage in the wide range
of industry segments and focus strategies target the cost advantage or differentiation in
narrow range of industry segment (Okeyo and Irene 2017).
Competitive advantage
Competitive Lower cost Differentiation
Cost
leadership Cost leadership Differentiation