The biggest news this week in the financial industry has to be the DBS safe box fiasco. While potential losses from lawsuits brought by angry customers and the damage done to the bank's public image are hard to estimate, we reckon the Singapore-based banking giant is not the only one frustrated by the huge publicity the incident has been generating in the media.
Over the past week a number of mid-tier banks have tried to steal a march in the ultra-competitive tax-loan race, which officially kicked off on Tuesday with Dah Sing Bank announcing its interest rates. But Dah Sing and the other banks that followed suit could only look on helplessly as news of their product launches became overshadowed by the DBS story.
When it comes to product innovation, the banking industry has always been looked at as one of the most boring in the business world. After all, there are only two directions interest rates can go. Take a new loan as an example; besides interest rates there aren't really many other areas a lender can manoeuvre to make it stand out.
Which is why we must take our hats off to some banks for the gimmicks they have come up with this week. But having said that, we have no way to tell if the features advertised will actually materialise or if they can benefit consumers to the extent they promised.
Bank of America (Asia), one of the most aggressive players in the tax-loan market, was the first to counter Dah Sing's surprisingly early move - Dah Sing even set a deadline of October 27 for customers wishing to borrow on the so-called 'preferential rates'. We put that term in quote marks because just lately banks seem to have developed a habit of breaking these promises. In the past, an announcement extending the preferential interest rates has come out at a later date once the bank has achieved its initial objective of attracting a number of early birds.
But back to Bank of America which pioneered some of the tax-loan gimmicks that have become features these days.
