Failing to adopt fintech will hurt banks in Singapore
THE need for Singapore banks to ensure successful collaboration and integration with fintech innovations and solutions providers is critical to survival.
A new S&P Global Ratings report claims that Singapore’s banks must adapt to fintech or lose out, pressuring local organizations to keep up with the fast-changing trends of their customers’ needs.
By itself, the Lion City is a great springboard to the fintech industry with strong regulatory support. Moreover, the country has 3,000 financial institutions, including every major global bank, located in its central business district.
However, the two worlds often stay separate.
As consumers are increasingly open to adopting fintech, the sector’s future growth is attracting entry of new service providers.
In the event that this happens, the current equilibrium of Singapore’s financial industry will be tipped over. The impact would potentially hurt and scar the profitability of existing financial institutions.
Not all Singapore banks are investing in this new technology. However, it should only be a matter of time that they do and the time is now.
Fruits of labor for the fintech industry can only be reaped over the medium to long term. So, local banks should take actionable steps towards this digital transformation — now, before it is too late.
S&P Global Ratings Credit Analyst Ivan Tan described digital transformation as imperative for Singapore’s banking industry. Incorporating new technologies in the local banks will improve competitiveness in the long term.
“Investment in fintech is necessary for Singapore banks to defend their competitiveness not just among regional peer banks, but also against the tech giants that are penetrating financial services,” he said.
Failing to adopt this piece of the puzzle to tomorrow’s financial technology will cause banks to lose customers as well as market share.
Subsequently, the decline would also bring lower profitability and ratings to the local banks.
In this technology-intensive era, businesses need more than just good products or services to survive. They need to always be on the lookout for innovation that dedicates the processes to truly provide solutions to consumers.
In this case, Singapore banks embracing fintech and other technologies will help with them promote sustainability well into the future.