Sep 3, 2007
POSB: Then and now
Once the nation's darling, some say POSB became something of a neglected stepsister when it was taken over by DBS nine years ago. Now, DBS is tapping into fond memories of The People's Bank, as it rejuvenates the brand with new branches, new products and a new level of service. Bryan Lee reports
FOR more than a century, POSB has stood as the champion of the small saver.
But it is how the bank and its staff go out of their way to help customers that makes it much more than just a place to store cash.
Back when POSB was a statutory board, old illiterate customers would approach tellers for help to read letters sent to them by the Government, POSB stalwart Chua Bee Choo recalls.
And for those who were too sick to go to the bank, staff would literally go the extra mile to the hospital or home to help the account holder complete the transaction, says another long-serving POSB employee Lili Chee.
(continued after pictures)
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-- PHOTOS: ST FILE PHOTO, POSB OLD AND NEW: From the first POSB Girl to the current staff in the latest uniforms, it has always been service with a smile. |
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BIGGER AND BETTER: The new branches are at least double the size of old ones. KEY TRANSFORMATION: The physical changes in the facade of POSB branches over the last 30 years are unmistakable. |
Today, the bank is a commercial division of DBS Bank and may appear to some as little different from any other retail bank. But it remains, for scores of Singaporeans, still the People's Bank.
Founded in 1877 as the Post Office Savings Bank by the British colonial government, POSB has always been a key promoter of thrift among the general population. Those early days are still fondly remembered by older Singaporeans who recall saving with the bank in their schooldays.
'When I was a schoolboy in the 1930s, we were encouraged to save our pocket money by buying and pasting postage stamps on POSB cards,' says retired shipping businessman and regular Straits Times Forum page letter writer Lee Kip Lee.
'Once the card was filled with stamps, we would present it to the post office to credit our POSB account.'
Mr Lee, the father of local musician Dick Lee, also recalls that withdrawals were not instantaneous. 'To discourage spending, withdrawals in excess of $25 meant having to obtain approval from the Malayan higher authorities in Kuala Lumpur and thereby took more time to process.'
The focus on thrift continued when the bank was made a statutory board in 1972.
The Singapore Government then saw the bank's potential to promote the saving habit among Singaporeans, which would create a key source of financing for public infrastructure.
Under the new mandate, reforms, especially to ease the withdrawal of deposits, were made. Meanwhile, the bank started to computerise its operations, an industry first then.
It was also at this time that POSB developed a separate identity from the postal service. The familiar blue-and-yellow key logo was born, as was the POSB Girl later in 1977 - she was the approachable bank officer who cared more about helping customers than earning commissions.
'We were part of the public service and we were very enthusiastic and passionate about working to better the lives of the people,' says Ms Chua, who joined the bank 32 years ago.
The transformation was a big success and over the next 26 years, POSB cemented its position as the People's Bank, offering convenient, low-cost services with a rock-solid guarantee from the Government.
The bank was also at the forefront of a number of industry innovations, including the Giro electronic payment system, direct salary crediting and the automated teller machine (ATM), of which it had the biggest network.
Its home-loans arm, Credit POSB, was also a huge success as many homebuyers took advantage of its lower interest rates. Set up in 1974, it was formed to encourage home ownership and to stimulate the property market after the oil crisis in the previous year.
That era came to an end in 1998 when POSB was acquired by DBS, as the Government sought to give the commercial institution enough muscle to become a regional financial powerhouse.
While some rivals were miffed that they were not given a chance to bid for the popular bank, the biggest outcry came from the man in the street. Over the next few years, many Singaporeans spoke against the merger and against POSB's new parent.
After the conversion to a full commercial bank, home-loans borrowers had to wave goodbye to the cheap mortgages they had been enjoying.
Also, a government tax change meant that POSB was no longer the only bank with tax exemptions on interest paid to savers.
The introduction in 2000 of monthly service fees for small accounts drew further flak, as depositors were incensed that the bank would sacrifice poor Singaporeans for its bottom line.
This came despite the fact that exemptions are made for more than a million accounts of the young, the elderly, full-time National Servicemen and recipients of social welfare benefits.
An ongoing shutdown of POSB branches and ATMs raised fears that the bank's new owners might drop the much- loved name in favour of a more unified brand.
For POSB staff, it was a tumultuous time as they feared for their jobs and the end of a warm, family-like work environment that they had enjoyed for years.
'I can't kid anybody. POSB staff were very proud of the POSB tradition and if they had a choice, they would not want to leave the bank,' says Ms Chua. 'We had tears...a lot of tears.'
The $1.6 billion deal was not a shoo-in success for DBS either.
Integration of the two giants, with their very different cultures, was difficult and POSB was no money-spinner then.
DBS said in 2002 that the POSB franchise was bleeding $44 million a year as the bank was unable to cover the cost of serving small customers.
Critics say that DBS neglected and underinvested in the POSB brand during those early years after the merger.
But DBS regional consumer banking head Edmund Koh dismisses the notion that DBS had ever considered dropping the POSB name or its mandate to serve the average Singaporean saver.
'DBS had every intention to preserve POSB but didn't communicate that explicitly. This resulted in much misunderstanding from many interest groups, from grassroots organisations to the media.'
Indeed, rejuvenating the People's Bank has been a key priority since Mr Koh joined DBS six years ago.
The bank started to open new POSB branches while refurbishing existing ones, spending several million dollars in the process. It also set up a new division in 2002 to take special care of the POSB franchise.
Major change
BUT a bigger transformation has been taking place in the past two years. While few can miss the external makeover of the 49 branches, more significant is the change in the way DBS is approaching the POSB brand and business.
More than just a distribution network for DBS products, POSB is now seen as a valuable and moneymaking division to be developed in its own right.
While still a favourite among small depositors, more than a handful of accounts go into the millions, requiring a reconfiguration of the bank's passbook printing machines which could print up to only six-digit sums previously, says Mr Koh.
'Just like you wouldn't eat hamburgers every day, you can't go to Les Amis every day,' he says, referring to the upmarket French restaurant.
The bank now has its sights on revenue growth, and aims to achieve this by cross-selling more sophisticated products to its customers as their banking needs grow with their aspirations.
To do this, the new-look outlets are on average two to three times bigger than their predecessors. This is to provide more space for bankers to have the longer private discussions required to sell wealth management services.
Broader reach
THE move to go beyond basic savings is paying off. The proportion of deposits at POSB that go into investment products such as unit trusts, has doubled to 20 per cent over the past several years.
And the cost-to-income ratio has fallen from 99 per cent to 60 per cent - and is still falling.
At the other half of the equation, POSB continues to keep a tight rein on costs. For example, top DBS and POSB staff spent hours behind a teller's desk to optimise the counter's design, standardising stationery and furniture to help reduce refurbishment costs.
POSB chief Davy Wee, hired to lead the bank in 2004, proudly declares that the $35 million transformation it is embarking on is comfortably below the initial $57 million budget.
Mr Wee, a former McDonald's executive with more than 20 years of mass retail experience, also helped put in place a sophisticated planning tool for the bank's branch network.
Using a matrix of 16 factors, such as demography and human traffic, the tool has helped the bank streamline its network to serve each district more efficiently.
For example, the Tiong Bahru branch was moved from its cramped location opposite the wet market to a larger outlet next to the MRT station at Tiong Bahru Plaza.
Beyond the dollars and cents, the other half of the new strategy is to tap the wealth of goodwill and trust it has accumulated over the years. Its upcoming publicity drive will feature emotive ads designed to tug at the heartstrings.
Reviving the iconic POSB Girl, the TV advertisements feature images of warmth and family as Dick Lee's 1998 National Day song Home plays in the background.
Down at the branches, small touches like greeting customers with 'Welcome to your bank', help make them feel that the bank is there primarily to serve them.
Staff are trained to greet and offer help to any customer within 2m of them. On rainy days, they also lend customers their own umbrellas rather than corporate ones - a decision they made and one that goes some way to winning hearts, says Mr Wee.
Says Ms Chua: 'The service culture in POSB hasn't really changed much. There is still a core group of the old guard who now acts as good role models for the younger staff.'
Each branch is also encouraged to engage the local community.
During the relaunch of the Tiong Bahru branch, for example, food from famous hawkers in the area was served while at Bras Basah, a jazz band formed by Singapore Management University students kept guests entertained.
'We are neighbours first, bankers second,' says Mr Wee.
POSB's down-to-earth approach can also be seen in its products. The Everyday credit card launched two years ago was a big hit, with 150,000 sign-ups in the first year - half of whom were new card customers to DBS and POSB.
The card was unique in that it focused on down-to-earth things such as utility bills and groceries.
Ultimately, Mr Wee says that the basic rules of mass retail apply, be it serving hamburgers or selling mortgages.
'People just want to come in to a very pleasant environment, be served very quickly with products that are simple to understand.'
POSB's latest renewal comes just in time as rival banks have recently made big moves into the mass banking arena.
Global giant Citibank caused a stir last December when it hooked up with SMRT Corp to set up branches and ATMs at train stations, while launching a co-branded credit card.
This was followed soon after by OCBC Bank's February tie-up with NTUC FairPrice to offer no-frills banking services. The bank has also embarked on a $150 million revamp of its 60 branches in Singapore and 29 outlets in Malaysia.
It is still early days to see how these challengers will fare. But DBS is confident that the edge remains with POSB.
On the rising competition, Mr Koh said that POSB's established customer base and infrastructure are key advantages in the mass banking sector where size and presence matter.
'To build an infrastructure is very difficult. We have inherited one and we are reinforcing it thoroughly. I'm glad that competition comes from not one but from many because they will hopefully dilute themselves,' he said.
Key milestones
1877: Founded as the Post Office Savings Bank by the British colonial government.
1972: Made a statutory board by the Singapore Government.
1977: Created POSB Girl.
1998: Taken over by DBS for $1.6 billion and converted into a full commercial bank.
2002: New division created to take special care of the POSB franchise.
2007: Spending $35 million on a makeover to transform its branches as well as a major ad campaign.
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August 29, 2007 Wednesday, 09:02 AM
I
hope DBS has finally woken up from its arrogance and realises the
values of POSB. Though I do business with DBS, it is POSB that I love.
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(#3)
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August 29, 2007 Wednesday, 09:30 AM
Beneath
the facade of POSB brand lies the true essence that it is really DBS.
Minimum deposit balance inter alia was instituted only after the
merger. Rates are similar with DBS' and the only reason for the
investment in this brand is proven profitability.
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(#4)
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August 29, 2007 Wednesday, 09:55 AM
The
previous DBS foreign talent wanted to wipe POSB name off the records
with the merger. Now they do a complete U turn in the name of
profitability. Which local icon is next in line for this U-turn?
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(#5)
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August 29, 2007 Wednesday, 11:18 AM
Instead
of spending so much money on a makeover, DBS should use the money to
keep branches in the heartlands open. I've been living in the Whampoa
Drive/Balestier Road area for 30+ years. I remember when there were
several DBS and POSB branches at Whampoa Drive, Whampoa Road and
Balestier Road. These branches slowly disappeared when DBS bought out
POSB.
The last remaining DBS branch at Balestier Plaza shut its doors sometime in the 1st half of this year. With this closure, my parents - and I believe countless other aged folks - have to travel to either Novena, Toa Payoh or Towner Road to perform their banking transactions. I've also been inconvenienced by this closure because of the large number of transactions via my POSB account but not as much. However, it was enough for me to open a savings account at another local bank and I'm considering transferring all my transactions to the new account in case I need to visit a branch to sort out any matters. My message to DBS is : Do not forget the longtime customers while targetting new ones. |
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(#6)
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August 29, 2007 Wednesday, 12:45 PM
Profitability
is the driving force here. Not a sincere gesture from DBS to thank
POSB's longtime customers. To show its sincerity to its longtime
customers, DBS should have retained the true essence of POSB when they
merged almost a decade ago. While spending millions to woo the new,
forget not the old.
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(#7)
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August 29, 2007 Wednesday, 12:47 PM
POSBank used to a caring bank, the people’s bank.
Since the take-over by DBS Bank, Nothing good has come out of it. DBS is one of the BIG FOUR, however it is one of the most arrogant of bank. The customer service is almost non-existent, service one of the worst as the attitude is wrong. The mentality is that of the untouchable, being a part of Singapore Inc, being a part of the Garmen, so it can do no wrong. Precisely of this, there is no longer service, it is just like another stat board, following SOP, only go by the book, and never think out of the box. Do you know of the number of POSBank branches that were closed since the take-over, leaving many heartlanders high and dry, making many switched to the other BIG THREE, and I was one of them. If you look at the opposite of what DBS had done, OCBC had opened more and more branches with Sunday operations, making banking easy for the Heartlanders. DBS is like SBS Transit, same Garmen cashcow and don’t think much of the public. Remember the same mistake once SBS transit took over the NE MRT Line, many bus services were removed and many NE residents suffered. The point is that DBS had lost its hold on the public and POSB is no longer the people’s bank, although many are still sentimental about it. DBS has lost the support of the heartlanders and many Singaporeans through its ignorance and arrogant. DBS has one of the worst service. Only money talk. |
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(#8)
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August 29, 2007 Wednesday, 06:39 PM
一针è§è¡€ï¼Œå¦™ï¼
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(#9)
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August 29, 2007 Wednesday, 06:59 PM
DBS,
you had left a sour taste in every Heartlanders and more. a leopard will never changed its spots. You have done a great injustice to the People's Bank. it will be hard for you to win back the customers. all you see at POSB and DBS is queue, queue, queue . . . . that is the irony of Singapore Inc. |
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(#10)
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August 29, 2007 Wednesday, 08:52 PM
DBS has lost its way, it is too naive to think that it is a National Icon. POSBank used to be a National Icon but since the DBS take-over, it has lost its roots, it has lost the trust of the people. DBS has made more enemies than friends. DBS is no SIA, DBS is not even branded. DBS is just DBS, with the local population, you can't even be compared to OCBC with its wider reach to the Heartlands. In the international arena, there is only Citibank. you can't even convinced the local with your "tactics", how can you stand out internationally. Now, you have to fall back on the POSBank, it used to be the People's Bank but not anymore. DBD, you are too arrogant for your own good, your service "sucks" your reputation tarnished by your own undoings. There is just "nothing" good about DBS to talk about. |
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August 29, 2007 Wednesday, 09:11 PM
after the makeover, expect charges to go up
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(#12)
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August 29, 2007 Wednesday, 09:12 PM
POSB account holders provide the cheapest cost of fund to DBS Bank
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(#13)
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August 29, 2007 Wednesday, 09:52 PM
Instead
of spending money on a makeover, perhaps POSB should really consider
increasing its interest rate for its various deposit accounts,
especially ordinary savings account which most heartlanders are having
as their main account.
Even NTUC Fairprice savings account is giving 1% per annum and MayBank is giving 1.68% with minimum $5000 deposit with its iSavvy account. I for one, had no choice but to close my POSB account last year because I see no benefits in maintaining one, even though it is considered sentimental for me as it was my 1st bank account opened using the squirral stamp pasting plan in primary school. |
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(#14)
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August 30, 2007 Thursday, 05:59 PM
Where
banks are concerned, you can be sure this forum page is for cosmetic,
venting purposes only. These banks will listen only long enough to spit
back a "template" reply about customers being important to them, etc.
You just watch and see...
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(#15)
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August 30, 2007 Thursday, 06:54 PM
DBS,
you have left it too late, you think you had it with POSBank, but you had messed it up badly. Many of your customers had gone to your competitor, namely OCBC You think you got Garmen backing and you acted too arrogantly for your own good. POSBank will never be the same again, from the bottom of my heart. You have lost our trust and our heritage. DBS - you blew it. |
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(#16)
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August 30, 2007 Thursday, 07:51 PM
'We realised that we actually have a huge, powerful brand in our franchise'
'I think, perhaps, we might have underestimated the huge amount of equity and the huge amount of emotional engagement that Singaporeans have with POSB.' Took DBS almost 10 years to realise the painfully obvious What were they thinking trying impose the DBS brand onto POSB? I hope it's still not to late for POSB - but I have a funny feeling that it already is. |
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(#17)
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August 30, 2007 Thursday, 10:38 PM
POSB's online banking is the worst ever. Full of rubbish compared with UOB which is neat and simple.
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(#18)
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September 01, 2007 Saturday, 08:42 AM
DBS
you have closed too many branches in the Jurong West area, like many of
your longtime customers, I have switched over to OCBC.
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(#19)
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September 01, 2007 Saturday, 03:54 PM
During
the past few years DBS after absorbing POSB started to 'consume' banks
overseas and some of the overseas banks are not really generating much
income towards the group. However one can see a few years when MOF
regulates the limited number local banks we saw a lot of 'big fish eat
small fish' and landed with a lot of tears shedding sessions. At the
end of the road, what happened? Long 'snakes' everywhere, especially
POSB and DBS, not because of the doubling of account holders but the
shutting down of what MOF claimed to be excessive branches. After a
cycle one can see more and more POSB banks are sprining up all over the
island. So the so called 'makeover' is in actual fact a cover up of
more branches coming up.
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(#20)
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September 01, 2007 Saturday, 10:28 PM
c'mon, get real, DBS is NOT interested in small business. they are only interested to lay on (rely on) big corporates |
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September 02, 2007 Sunday, 10:06 AM
I
agree with lesterch fully. The service at DBS sucks. But thats the same
with all the Big 4 banks in Singapore. I think in the long term, they
are bound to collapse if they do not pul up their socks. Customer
service is one, but the knowledge these customer service officers have
is another. Most are dump and give incorrect advise and answers.
Nowithstanding, they are damn arrogant.
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(#22)
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September 02, 2007 Sunday, 01:11 PM
vcnsn777 :
the sad truth is that the Big 3 banks will not collapse unless they lend all the money to the US subprime..... they are not interested in smal retail customers....so if their service sucks, they are happy to shed (not lose) small customers when the sun shine, they lend u the umbrella, when it rains, they take it back because they can't allow it to get wet....shareholders won't be happy ! and there is no more POSB !! |
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(#23)
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September 03, 2007 Monday, 09:20 AM
It's all about profitability period by DBS. POSB is dead, long live POSB.
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(#24)
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September 03, 2007 Monday, 11:13 AM
Finally
DBS have come to see what an asset POSB is! Am so glad that this iconic
bank, the 'poor person's' bank is sprouting out all over again. When
branches were closed I sorely missed it, so it is a feeling of 'welcome
back!'
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(#25)
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September 03, 2007 Monday, 05:57 PM
...welcome back ?? are they willing to reopen those closed branches ?
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(#26)
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September 03, 2007 Monday, 08:36 PM
the
branches they closed were mainly in HDB heartlands out of the town
centres, so those branches we see now are mostly in or near shopping
centres
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(#27)
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September 04, 2007 Tuesday, 05:06 AM
What a joke !
DBS is the one destroying POSB only a few years ago with their incoming new foreign CEOs. Where are they now ? All resign and gone ! DBS is a very ignorant bank. A good example is the 2FA system which DBS forced upon her customers with only ONE method. Other banks gave 2 or 3 alternative methods to choose from. I will advise DBS that an exterior makeover is nice but what is solely needed is a management style makeover and a major re-focus back to what the customers' needs and wants. How many more years can DBS continue being so ignorant ? . |
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(#28)
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September 04, 2007 Tuesday, 01:53 PM
it is a messy house inside, with fallen talent................................ |
I remembered foundly that I had opened my POSB account when I was a little child at Bedok North Branch. Subsequently, after POSB was accquired by DBS, the branch was closed and we had to do our banking transactions at Bedok Central, which is always packed like sardines everyday.
Despite the acquisition, the staff continues to be friendly. And they are more friendlier than those in DBS.
Unfortunately, DBS has failed on us again and again. And I had to say farewell to my POSB account I had been holding since 1994.
I just feel that DBS has always neglected our national darling. POSB has the most depositors. Long time customers are die-hard loyal to POSB. But yet again, DBS took us for granted. Remember. in this time of crisis, it's the poor, the grassroots, who is funding the "rich" and "powerful".
Posted by: J | November 23, 2008 at 10:39 PM