With Singapore soon to issue digital bank licenses, consumers say they are keen to try out new players with no prior experience in the banking sector if they offer the right incentives, such as sign-up promotions and better rewards. In fact, 75% express a willingness to bank with established companies that are not in the financial services industry or with companies that are within the sector.
Another 63% would bank with new startups, according to a study by Visa, which polled 511 respondents in the city-state. A bigger majority, though, at 84%, were keen to use digital banking services provided by an existing bank, with 65% receptive to the idea of adopting a digital-only bank, also known as a neobank.
Among these, 60% would move some services from their current bank to digital-only players with no prior experience in banking, the survey revealed, while some 20% would not hesitate to move all services to a neobank.
Increased emphasis on building a cashless society to reflect country’s success as a smart nation is misplaced, when the importance of getting the fundamentals right is overlooked.
Singapore respondents pointed to sign-up promotions, more innovative products and services, as well as access to better rewards as reasons they would use digital banking services offered by non-bank players.
In addition, 64% would use digital banks to facilitate money transfers to family and friends, while 64% would do likewise to pay their bills, and 56% would do so for payments at retail outlets.
The survey also found that 54% of consumers in Singapore would choose digital banks for convenience and 52% would do so for faster service. Another 45% would opt for the digital route to skip the lines.
With regards to personal data they were willing to share, 67% pointed to bank account history while 64% cited their contact information, and 63% would share their social media profile.
Visa’s country manager for Singapore and Brunei, Kunal Chatterjee, said: “The digital banking space in Singapore and Southeast Asia is set for a year of unprecedented growth, setting the stage for the next revolution in banking. When the region shifts to a millennial, digital-led demographic, more consumers will expect digital-first experiences and want their banking and payments to match the speed and convenience of their user journeys.”
Singapore last June unveiled plans to issue up to five digital bank licenses as part of efforts to add market diversity and boost the local banking system. The Monetary Authority of Singapore (MAS) said this would include two digital full bank licenses, allowing licensees to offer financial services and take deposits from retail customers, as well as up to three digital wholesale bank licenses, which would enable licensees to serve small to medium-sized businesses and other non-retail segments.
The industry regulator in January revealed it received 21 applications for the licences, including seven for the digital full bank licences, with the remaining application for the digital wholesale bank licences. Organisations that have publicly announced their bids included a consortium led by local wellness and lifestyle brand V3 Group and contactless card company EZ-Link, games hardware maker Razer, and internet company Sea, which owns e-commerce company Shopee.
MAS said it would unveil the successful applicants in June 2020, with these companies expected to commence business by mid-2021.