How ready is the Singaporean consumer for digital banking?
SINGAPORE has long been at the forefront when it comes to digital adoption in the banking sector.
Recognizing that within their borders lies a burgeoning digital-first population, the city-state has been quick to adapt and respond.
Some actions taken include fostering an innovation-friendly environment, forming partnerships to facilitate cross-border data sharing for banking purposes, and most importantly, propelling digital banking forward at full steam.
For businesses that wish to make the most of the Singaporean digital banking landscape, it is imperative to understand that each market is unique-there is no one-size-fits-all solution.
Thus, a robust understanding of current customer needs must be obtained before leveraging technology in business models to meet those needs.
# 1 | Who will go digital?
A recent report noted that in Singapore, those interested in digital banking are the more affluent (70 percent) individuals aged 18-24 (73 percent).
This is because they have more investable assets and prefer to transact via screens.
Bank customers with e-wallets also expressed a higher interest in digital banks. With 84 percent of bank customers currently having e-wallets, this speaks volumes about the potential of this market.
# 2 | Why go digital?
Long queues (42 percent) and long hotline wait time (23 percent) were the primary pain points with traditional banking, followed by limited offline banking capabilities (13 percent).
Naturally, those who experience more pain points are more likely to go digital.
The younger and more affluent are already comfortable with self-service channels. With all that digital banking offers, making the leap is a no-brainer.
However, most still prefer human interaction for emergency situations like lost card or fraud (64 percent), wealth management (63 percent), and mortgage (58 percent).
While 63 percent of customers prefer to do their own research for investments, 38 percent would still turn to financial advisors, and only 9 percent will be comfortable using a robo-advisor to allocate investments.
This is consistent across all income and age groups, indicating that a win-win situation would be for professional advisors that are supported by technology to be available to customers.
# 3 | What do customers value?
For those aged 25-55+, attractive interest rates on deposit and lending were what they valued, whereas for those aged 18-24, it was the experience that mattered.
Sixty-six percent of customers would also like to see their banks provide other services such as e-commerce, financial education, travel-concierge, and life coach.
Data security and privacy are also highly valued. Compared to Malaysia (64 percent), Singapore customers (55 percent) are cautious when it comes to sharing personal data.