Digital Banking: Singapore customers take charge – Are you ready?

PwC’s digital banking customer survey – Singapore report

 

 

The next evolution of Banking

 

Consumers in Asia are rapidly adopting digital technologies for their day-to-day lifestyle and financial needs. Recognising this, banking regulators across Asia, including the Monetary Authority of Singapore (MAS), have started to open up the banking markets with the granting of new banking licenses for digital-only banks. The first digital banks are on track to launch in Hong Kong in early 2020, with Singapore and Malaysia to follow shortly after. The entrance of these new players, who are likely to be a mix of stand alone applicants and consortiums made up of financial and non-traditional players, is one of the biggest disruptions the market has seen in decades. Multiple drivers have led to this banking revolution in Asia. First, the region is home to a burgeoning middle class and a significantly younger digitally savvy population. Second, daily digital penetration is high and continuing to grow. Third, the rise of super apps has created an increasing value chain of goods and services within just one platform. Thus, it is critical for banks to be able to continuously evolve their business model that best fits their current customers needs, leverages the latest technology, and complies with the appropriate regulatory environment.

 

PwC’s Digital Banking Customer Survey was conducted to explore what customers in Asia have top of mind when they are thinking about the changing banking landscape and conducted interviews over 4,500 bank account owners aged 18+ in Hong Kong, Singapore and Malaysia in early October 2019. 1,501 of these respondents were from Singapore.

6 key focus areas

 

Delivering a superior experience goes beyond simply offering digital products and services - it is about creating a proposition that speaks directly to the wants and needs of the customer. From our research, we uncovered six key areas for banks to consider in 2020:

1. Awareness and Interest: There is strong awareness and high interest in digital banks, particularly among the younger demographics, and the more affluent.

2. Switching Propensity: The majority of those who open an account with a digital bank will still keep their existing (traditional) account as their primary account.

3. Customer Satisfaction: Some customers feel under-served by their existing bank and may consider opening a digital bank account to address service gaps.

4. Shift to Self-Serve v the Human Touch: Singapore customers are comfortable dealing with self-service channels for day-to-day transactions and in doing their own research for investment decisions. However, when it comes to higher value, more complex transactions, or emergency situations, customers want to interact with a human being.

5. Evolving the Proposition: Customers continue to place emphasis on features that provide them with monetary valueadd such as better interest rates and promotional offers. They also want to see additional non-financial features, of which an integrated e-commerce platform and financial education are the most attractive for Singapore based customers.

6. Data Security and Financial Security: Customers are concerned with their data privacy and financial security, but less so for the younger and more affluent customers.

 

Digital banks should put customers at the heart of what they offer. Having spectacular rates for example helps acquire customers in the short-run. But, to be successful in the long run, digital banks need to provide each customer with a personalised offering and a seamless customer experience, said Andrew Taggart, Financial Services Leader, PwC Southeast Asia Consulting

Chulayuth Lohchotinan, Consulting Partner, PwC Thailand added that “Thailand is gearing towards the world’s leading mobile banking penetration and the Covid-19 has accelerated the robust growth in digital banking.  Currently, Bank of Thailand is studying to issue digital banking licenses aiming to fully-integrated financial service solutions and to cope with increasing consumers’ demand and digital lifestyles.  Big Thai banks have set up their fintech subsidiaries to enhance digital banking services.   Other non-banks have played vital roles in banking revolution.  It is expected that digital banking services will not replace the traditional universal banks, but to widen new financial services fit to everyday lives and customized to particular customers’ needs such as personalized financial planning.

 

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