The arrival of virtual and digital banks has piqued the interest of customers, but few are likely to make the switch, according to a new report.
Two in five Singaporeans would only consider opening a bank account with a digital bank if it is popular and successful, and even if they did, just one-third would make it their primary bank, according to a digital banking customer insights study published by PricewaterhouseCoopers.
The report noted high satisfaction levels among customers in the region with their primary bank, though 71 percent of Singaporeans indicated at least one pain point with their bank. Those with more than three pain points are more likely to open a digital bank account, PwC said in «Digital banking: Singapore customers take charge».
Their frustrations with their primary bank included queue times (42 percent), long wait times on the hotline (23 percent) and the inability to perform banking functions online (13 percent). Respondents said they would be attracted to open an account if they could get better rates on deposit and lending (49 percent), better online customer service (42 percent), and a better mobile/digital experience (40 percent), according to the report.
Perfect Fit for Young, Affluent
PwC said the transition to digital banking is expected to be smoother among the young and affluent as this group already use self-service channels for their daily banking activities, while those who have more investable assets and own a wider array of financial products are also seeking better and easier ways to manage their money.
Over 70 percent of 18-39 year-olds and 70 perecent of those in the high-income bracket indicated they were «very interested» or «interested» in opening a digital bank account.
Beyond Financial Services
The report highlighted an opportunity for digital banks to consolidate their various offerings on one platform with differentiated customer experiences, as two-thirds of Singapore customers saying they are «interested» or «very interested» in having their digital bank offer non-financial features, including tickets, travel concierge, financial education and personal life coaching services.
«To ensure their long-term success, it is critical for digital banks to have a strong proposition that goes beyond offering traditional financial services, but also engages with their customers on a more holistic level. This will be particularly important as customers are increasingly calling for integrated platforms that offer a full suite of lifestyle services,» said Sam Kok Weng, Singapore Financial Services Leader, PwC.
Digital Security, Human Touch Still Important
However, the report showed that digital banks have a long way to go in creating a sense of trust among potential customers. PwC noted that Singaporean customers are more wary about the security of digital banks than their neighbors in Malaysia, with only 55 percent saying they were willing to share personal data with digital banks.
About one-third of customers said they do not trust digital banks with personal data security and 30 percent did not trust their financial stability. A large number of respondents also indicated a preference for human interaction in transactions related to emergencies (64 percent), wealth management (63 percent), mortgage (58 percent), and insurance (56 percent).
The survey was conducted among 4,500 bank account owners aged 18 and above in Hong Kong, Singapore and Malaysia in early October 2019, with about one-third of respondents from Singapore.
