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<p align="justify">United overseas bank (UOB) was founded in 1935 by Datuk Wee Kheng Chiang and was renamed in 1965 (United Overseas bank, 2021). The bank is based in Singapore and is the third-largest bank in Southeast Asia. UOB provides a bouquet of services; the bank offers commercial and consumer finance services, management services, and bank services in investment banking. The investing arm offers assets management, corporate finance, venture capital, and insurance services. The bank has an expansive network in Singapore, and it has 68 branches across the city-state; along with that bank has 500 branches in 19 countries. In 2020, UOB had performed exceptionally well and earned accolades, including Best Domestic Bank and Best International Bank in Thailand. Porter&#8217;s five forces model is a valuable tool to identify threats and opportunities faced by UOB in the financial services sector.</p>
<h2 align="justify">Competitive Rivalry in the Market</h2>
<p align="justify">Singaporean financial services sector is among the best globally, and it is one of the most important industries of the city-state. The famed sector is also immensely competitive; there are 100 commercial banks, 29 merchant banks, and 40 representative offices of foreign banks. The largest banks based on total assets in 2016 are DBS Group, Oversea-Chinese Banking Corporation (OCBC), and United Overseas Bank (Statista, 2019). The largest banks in Singapore are UOB, DBS group, and Overseas-Chinese Banking Corporation (OCBC). DBS group recorded $13.18 trillion in revenue with a profit margin of 25.32% in 2020 (Nikkei Asian Review, 2021). In contrast, UOB has posted a gross income of $12 billion and earned $3.2 billion (Forbes, 2021). In the same fiscal year, OCBC posted revenue of $24.9 billion and made a profit of $3.6 billion (Forbes, 2021). The quality of the financial sector and rich return on investment attracts mega Banking Corporation across the globe, therefore, making the industry highly competitive.</p>
<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">The threat of substitutes is low in the shorter-term horizon, but it is moderate to high over a more extended period. The threat is always high when better products are on offer with the same or low price. Singapore is one of the most forward-thinking nations, and they are comfortable with technology and harbor an innovative environment. Due to the creative society, fintech companies are imploding in the region and are leveraging cutting-edge technology. These companies pose a real threat to the banking sector, but in infancy, they only offer a single product against the variety offered by traditional companies. As Uber and Air BNB disrupted their respective industries, Fintech is trying to disrupt the traditional banking industry (Saeed Azhar et al., 2016). With more and more people willing to adopt the new technology, there is a threat for conventional institutes if they do not evolve. However, in the short-term, there is a low to a moderate threat to traditional banks.</p>
<h2 align="justify">The Threat of New Entrants</h2>
<p align="justify">Even though there is conducive environment that promotes innovation and creativity, there are still inherent barriers to entry that cannot be overlooked. The most significant barrier to entry is high initial capital requirement and massive compliance in the financial services sector. The monetary authority of Singapore (MAS) plans to grant five digital licenses for serving retail banking customers and digital banks (Rachel Green, 2019). Despite the push by the state and many companies trying to break into the sector, they are faced with the dilemma of a similar product. For the disruptors to be successfully integrated into the market, they need to achieve product differentiation and offer better services. It is a daunting task to achieve such a product mix. However, in the short term, companies in the sector face moderate to a low threat.</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">In the financial services sector, consumers usually have high bargaining power. Singapore is tech-savvy and is the top financial sector in Asia. There is already intense competition; digital banks have intensified the competition in an already highly innovative marketplace (Darwin Jayson Mariano, 2020). Buyers have options to choose from the best price on offer coupled with convenience and value. Competition among brick-and-mortar banks and digital ones has started the price wars, resulting in discounted services. These digital banks are offering specialized tailored products at affordable prices, thus putting traditional banks under pressure. In addition, there is a low switching cost and an easy process to switch among banks. In the Singaporean financial sector, buyers have high bargaining power.</p>
<h2 align="justify">Bargaining Power of Suppliers</h2>
<p align="justify">Supplier&#8217;s power depends on the underlying factors, such as demand and supply principles and the nature of the input, specialized or general. The general inputs for a retail bank are from lending institutes, generating funds by leveraging products and customer deposits. In addition, another primary source of input is skilled financial experts. Lending institutes have strict lending policies, and loans are sanctioned after due diligence against suitable collaterals. Consumers are aware of their value and the competitive market; therefore, they can exert higher bargaining power. When consumers are mindful of their importance to the business, they can exercise high bargaining power (Dess et al.,2005). However, in the skilled workforce, enough aspirants are willing to work in the high technology financial sector, increasing competition for places in the financial industry. Considering the situation, suppliers have moderate to increased bargaining power.</p>
<h2 align="justify">References</h2>
<p align="justify">Dess, G. G., Lumpkin, G. T. and Eisher, A. B (2006). Strategic Management. Text and cases. International edition. London: McGraw-Hill.<br />
Darwin Jayson Mariano. (2020). Will the arrival of digital banks shake up Singapore’s traditional banking industry? Available at: https://digitalbankeronline.com/magazine/will-the-arrival-of-digital-banks-shake-up-singapores-traditional-banking-industry/<br />
Rachel Green. (2019). Grab confirms plans to pursue a digital banking license in Singapore. Available at: https://www.businessinsider.com/grab-pursues-digital-banking-license-in-singapore-2019-12<br />
Azhar,S. Zaharia, M. (2016). In race to be Asia&#8217;s fintech hub, Singapore leads Hong Kong. Available at: https://www.reuters.com/article/us-singapore-fintech-idUSKCN0ZJ10P<br />
Statista. (2019). Biggest banks by total assets in Singapore 2016. Available at: https://www.statista.com/statistics/755845/biggest-banks-by-total-assets-singapore/<br />
Nikkei Asian Review. (2021). DBS Group Holdings Ltd. Available at: https://asia.nikkei.com/Companies/DBS-Group-Holdings-Ltd<br />
Forbes. (2021). United Overseas Bank. Available at: https://www.forbes.com/companies/united-overseas-bank/?sh=30831d832044<br />
Forbes. (2021). United Oversea-Chinese Bank. Available at: https://www.forbes.com/companies/oversea-chinese-banking/?sh=6cf5e0d95861<br />
United Overseas bank. (2021). About us. Our Story. Our Corporate Profile. Available at: https://www.uobgroup.com/uobgroup/about/story/our-corporate-profile.page</p>
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