Digital dominance to decide Singapore’s retail banking future

Traditional banks are struggling to keep up.

As the most digitally serviced when it comes to banking in Asia Pacific, Singaporeans demand more digital services, including financial wellness and digital money management tools from their banks, a study commissioned by Backbase revealed.

Seven out of 10 Singaporeans use their bank’s existing mobile app, with 86% conducting their day-to-day banking via smartphone.

The study also said that 76% of Singapore consumers feel it is important that their banks provide digital money management tools. Additionally, 88% of Singaporean consumers said that the attribute they value most from financial service providers is an excellent mobile app experience.

“Our research shows Singaporeans are the most digitally serviced when it comes to banking in APAC – more so than Australia or Japan – which makes the race for digital dominance between traditional banks and soon-to-launch digital banks all the closer. It’s no wonder the retail banking sector is putting its foot on the accelerator and injecting another 70% additional spend into this area over the next 12 months, according to the study,” said Regional Vice President for Backbase in Asia Pacific, Iman Ghodosi.

The research also identified that the top challenge in the development of digital money management tools for most Singaporean banks is outdated or legacy technology.

Meanwhile, 66% cited a ‘lack of understanding of customer needs and outcomes’ as a barrier to their company implementing or further developing digital money management tools, whilst 52% said ‘competing priorities’ slows things down.

These challenges further gives most fintechs and neobanks, who are just waiting to take market share, an edge.

“One can see how fintechs have a head start. There is also a lack of understanding within legacy institutions on who owns the budget for these types of initiatives. Is it considered customer experience? Is it corporate strategy? Or is it marketing? When in fact it is all three, and more,” Ghodosi added.