Digital banking: Singapore customers take charge
PwC’s digital banking customer survey
– Singapore report
Customers 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 the banking markets with the granting of new banking licenses for digital-only banks.
So how are customers responding to this change? Are they ready to make the switch to digital banks? How open are they to the idea of sharing their data with digital banks?
PwC conducted a survey to explore what customers in Singapore have top of mind when they are thinking about the shifting banking landscape, if/how/when they are likely to react, as well as the potential implications for players in the banking industry, especially the digital entrants. Over 4,500 bank account owners across Malaysia, Singapore, and Hong Kong were interviewed, of which 1,501 respondents were from Singapore.
Explore key findingsThe majority of customers will not move their primary bank account to a digital bank
Our survey shows that 99% of Singapore customers will keep their current primary bank accounts even after opening a digital bank account, and 67% will continue to use their existing account as their primary bank. New digital banks are therefore more likely to initially displace customers’ secondary bank account rather than a customers' primary bank.
While many customers will keep their existing bank account as their primary one, they do face frustrations with these banks. Unsurprisingly, 77% of customers with three or more pain points were more interested in opening a digital bank account.
Digital banks should also expect to see lots of trialling in the short term as customers test out the different banks and experience what these banks have to offer.
What should players be thinking about?
- Building differentiated value propositions to get the attention of target customers and underserved customers
- Get customers attention upfront by offering elevated versions of what customers look for from typical banks (e.g. significantly better interest rates, promotions)
- Differentiate not only on services that helps acquisition (easier sign-ups, attractive offers) but also services that help to retain and engage customers (excellent service, fast problem resolution)
- Provide services that complement those that customers’ get from their primary bank account (e.g. non-financial services)
Customers want digital banks to also provide non-financial services
In addition to monetary value add such as better interest rates and promotional offers, 66% of Singapore customers would also like their digital bank to offer non-financial features, of which an integrated e-commerce platform, financial education and lifestyle services such as health, wellness and travel, are most attractive. This number is only likely to increase, as customers grow their appetite for platforms that offer multiple services (such as super apps which are increasingly common in Asia).
What should players be thinking about?
- Engage in partnerships with other entities to form an integrated ecosystem with various financial and non-financial services (e.g. payments, remittance, financial education, commerce) available
- Leverage open data architecture / open APIs to share customer data across various services in the ecosystem to gain a better understanding of customers’ needs and offer them personalised services
- Offer attractive deals by working together with third-party services
Customers do not trust digital banks with their personal data, nor do they trust that digital banks are financially stable
When it comes to data and financial security, Singapore customers are more wary than their counterparts in Malaysia, with 55% of Singapore customers likely to share personal data with their digital banks. Furthermore, one in three (34%) Singapore customers indicate that they do not trust digital banks with personal data security and 30% did not trust their financial stability. When it comes to gaining customer trust, incumbent banks may enjoy an advantage over new digital players.
In a world where customer data could be a source of competitive advantage, gaining customer confidence is key. The question, then, is how these digital banks could earn the trust of more customers and use it to provide value for their customers.
What should players be thinking about?
- Be transparent and educate customers about how their data is gathered and used and give customers control over their personal data
- Focus on building a robust data security framework and clearly communicate it to customers
- Provide value in return for gathering customers’ data (e.g. personalised financial tips based on age, income, and spending patterns)
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.
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Clients and Markets Leader, South East Asia Consulting, PwC Singapore
Tel: +65 9734 0662
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