The market is going through a liquidity-driven boom, but a market correction is on the horizon, DBS' chief executive said.

 «I think the amount of stress we will see in the real economy is going to be huge…everything suggests the recovery is going to be long and drawn out, including in China» DBS' Piyush Gupta said on Tuesday at Bloomberg's online «Invest Global» conference, in a panel about how the banking world will emerge from the crisis.

«It is a long process and I don't think we have seen the end of the crisis…There is a lot of emotions running wild and a lot of discrepancies across financial markets,» fellow panelist Filippo Gori, CEO Asia Pacific, J.P. Morgan said. 

Gupta said that intelligent investors might have missed out because they were looking at fundamentals, but there is a likelihood that a correction somewhere down the line to bring the financial markets more in line with the real sector.

Shift to Digital 

The bank's chief executive said that the shift to digital in the banking industry was already in the making for several years, and DBS used the crisis and widespread lockdowns as an opportunity to fine-tune its digital processes and address barriers to digital adoption.

«Even though we had a really good set of digital tools, Covid showed us that we still had some gaps, or "missing bridges" [that prevented customers] from fulfilling transactions online…We really accelerated building those bridges to complete this last-mile capability.»

Working From Home

Gupta said the most surprising result of the widespread lockdown was the ability of the bank's staff to continue working from home with minimal disruption to operations.

«A lot of managers would normally have been reluctant to let people work from home, even if there are officials policies to do that. That shift in the psychology of people has been profound. Ninety percent of people could safely work from home and do it over extended periods of time, Gupta said.

«I think that's what going to be the game-changer, and that shift will lead to a lot more flexible working arrangements than what we have seen in the past.»