Banks in Singapore need to protect advantages to remain relevant, study reveals

Consumers’ primary financial relationships (PFRs), hunger for digital solutions, and need for new online services were all investigated in EY’s NextWave Global Consumer Banking Survey, which was released recently.

The findings revealed that incumbent banks in Singapore must take steps to safeguard their competitive advantages in order to remain relevant to customers, relying on their long-standing trust connection to pivot with convenient and easy-to-use digital solutions such as super apps.

“Incumbent banks have a significant opportunity here to be the unifying point for consumers’ multiple financial relationships, given their trust advantage concerning the critical need of protecting consumer data,” said Andrew Gilder, EY Asia-Pacific Banking and Capital Markets Leader.

He added that owning a customer relationship through a super app “allows banks to better tailor their own products while also assisting consumers in consolidating their banking relationships.”

He pointed our that the open banking idea, as well as data exchange with appropriate consent, will be crucial enablers of this integration.

Singapore is one of the markets with the lowest neobank adoption rates in the world.

A neobank product or service is used by 23% of Singapore respondents, with technology brands seen to offer superior products and services and to be more innovative.

However, most Singapore respondents have yet to choose a neobank as their PFR, with only 1.5 percent choosing a neobank as their PFR, the second lowest rate of all the markets in our poll.

In Singapore, 55% of respondents had three or more financial partnerships, indicating that they don’t believe any one company will be able to service all of their demands.

It also shows that consumers will be willing to test out the services of the digital challengers.

Another 63 percent of Singaporeans consider seamless integration of all their financial activities to be very or extremely important, demonstrating how much importance customers place on integrating multiple suppliers’ services and activities.

“Super applications” that combine numerous financial services (e.g., checking and savings accounts, investments, and payments) into one app or digital experience are extremely or very appealing to 54 percent of respondents.

Partnerships with other financial institutions and high-tech businesses for extended products and services would increase the value of their PFR bank, according to 76 percent of Singapore respondents.

This percentage jumps to 85% for both the 18-24 (Gen Z) and 25-34 (millennials) age groups.

Strong privacy policies and features are, by a large margin, the top priority for Singapore respondents when it comes to influencing purchasing decisions.

Other aspects that Singapore customers value include rate and fee benefits (e.g., free products and services).