What Drives 53% of Singaporeans Away from Digital-Only Banking?

A plethora of technological developments and geopolitical occasions repeatedly upend the banking trade. 2023 was no exception, marked by extremely publicised financial institution failures, rising rates of interest, and numerous international financial challenges.

Amidst these upheavals, one fixed emerged: Individuals stay content material with their banks.

Within the fourth iteration of the EPAM 2024 Singapore Shopper Banking Report, 9,000 retail banking shoppers throughout 9 nations have been surveyed, revealing constant satisfaction throughout completely different demographics.

Nonetheless, regardless of this satisfaction, Singaporeans exhibit warning in the direction of distant banking, expressing discomfort with fully digital banking suppliers.

Singaporeans’ banking preferences

Regardless of the worldwide digital transformation sweeping the banking sector, Singaporean shoppers strongly choose conventional banking fashions.

Over half (53 %) categorical discomfort with banking suppliers missing native branches, whereas an identical proportion hesitates to interact with suppliers providing solely digital entry.

The convergence of banking with social media for automated monetary transactions raises even higher considerations, with two-thirds of respondents expressing unease, underlining the enduring attachment to standard banking practices.

The AI conundrum

Whereas expertise shapes fashionable banking, shoppers exhibit blended sentiments towards AI integration.

1 / 4 of Singaporeans report utilizing AI-enabled instruments for monetary administration, with excessive satisfaction charges. Nonetheless, over half stay hesitant to behave on AI-driven monetary steering, highlighting persistent skepticism.

Curiously, 97 % categorical satisfaction with the choices made amongst these utilizing AI-enabled instruments. Regardless of this satisfaction, 51 % of respondents stay uncomfortable appearing on monetary steering beneficial by AI providers.

Comfortability with AI steering varies by age, with 53 % of these aged 18 to 34 expressing willingness in comparison with solely 25 % of these aged 55 and above.

Constructing belief amidst technological developments

Shopper belief stays pivotal, with glorious customer support rising as the first purpose for financial institution satisfaction.

Regardless of technological developments, conventional banks retain client belief, presumably buoyed by regional financial institution failures.

Nonetheless, shoppers stay cautious about AI’s position in banking, emphasising the significance of clear communication and regulation compliance.

In line with the survey, 79 % of respondents belief their banks to deal with their funds, whereas 81 % belief them to maintain their information protected.

In the meantime, 91 % contemplate information security a very powerful facet of banking belief. This underscores the importance of sturdy information safety measures and clear communication relating to AI integration and information utilization.

Overcoming client hesitancy

As banks navigate the fragile stability between technological innovation and client belief, the emergence of Generative AI (GenAI) presents a promising avenue for personalised banking experiences.

Leveraging GenAI, banks can tailor communication and providers to particular person preferences, enhancing buyer interactions and fostering deeper engagement.

Whereas 68 % of respondents globally categorical a want for higher monetary training from their banks, solely 21 % report knowingly utilizing AI-enabled instruments for monetary administration.

Amongst those that belief their banks, 60 % are keen to share their information, highlighting the potential for leveraging client belief to drive AI adoption and personalised experiences.

In Singapore, main banks are pioneering the usage of AI to reinforce customer support and streamline operations. UOB Financial institution provides AI-driven options akin to UOB Mighty, a cell app offering personalised insights, and UOB BizSmart, automating SMEs’ enterprise processes.

With its devoted AI division, DBS Financial institution has developed over 600 AI fashions for providers like wealth advisory and threat administration. Instruments like ADA and ALAN spotlight DBS’s deal with utilizing AI for information governance and mannequin deployment, marking a major transfer towards digital transformation in banking.

Nonetheless, efficient implementation hinges on clear communication and compliance with regulatory frameworks, underscoring the significance of constructing client confidence in AI-driven banking options.

Incremental steps in the direction of AI integration, optimisation of back-office processes, and improved frontline worker insights are essential. Efficient communication methods should deal with client considerations and construct belief in AI-driven providers.

On the spot Funds are a precedence for shoppers

The report reveals a powerful client choice for fast fee capabilities. This means that the majority respondents view instantaneous fee as a vital service from their banks.

Particularly, 78 % of these surveyed highlighted instantaneous funds as essentially the most important function their financial institution might present them within the coming years.

This choice underscores the significance of immediacy in monetary transactions, aligning with the broader shift in the direction of real-time digital providers throughout numerous sectors.

For Singapore, a world monetary hub recognized for its technological innovation and strong monetary providers sector, the emphasis on instantaneous funds aligns with broader traits in the direction of digitalisation and fintech options.

Banks in Singapore more and more spend money on digital infrastructure to assist instantaneous fee programs, recognising their potential to reinforce buyer satisfaction, enhance transaction effectivity, and foster higher monetary inclusivity.

Leveraging belief for information assortment and personalisation

Excessive client belief permits banks to gather and leverage information responsibly. By understanding buyer habits, preferences, and life occasions, banks can present personalised experiences.

Nonetheless, transparency, compliance with rules, and information safety are paramount to sustaining belief.

In areas the place legally possible, banks can leverage social media and different sources to gather non-financial information, offering useful insights into buyer intentions and preferences.

Knowledge assortment and evaluation allow banks to ship well timed and related providers, enhancing buyer expertise.

Elements influencing banking selections in Singapore

Whereas total satisfaction with banks stays excessive, many shoppers ponder altering their main financial institution. Elements influencing this temptation embody household or pals’ banking selections, entry to native branches, model recognition, advantages, and digital expertise.

The youthful demographics present a higher inclination towards switching banks. Of all respondents, 30 % are contemplating altering their main financial institution within the subsequent 12 months.

Amongst dissatisfied respondents, 37 % search model recognition, 22 % worth good advantages, and 21 % prioritise digital expertise.

Future outlook for Singapore banking

The EPAM report identifies vital areas for innovation and enchancment that might form the way forward for banking in Singapore.

The demand for fast funds and personalised monetary recommendation, facilitated by AI and digital applied sciences, highlights the rising expectations of shoppers for extra responsive, intuitive, and customised banking providers.

Nonetheless, efficiently integrating these applied sciences into the buyer banking expertise hinges on overcoming current scepticism in the direction of digital banking options and AI-driven providers.

To bridge this hole, banks are inspired to leverage their established belief with clients, using technological improvements not as replacements for human interactions however as enhancements to the personalised, human-centred banking experiences that clients worth.

This method requires a fragile stability between advancing digital transformation initiatives and sustaining the core rules of belief, transparency, and private connection that outline the standard banking relationship.

Featured picture credit score: Edited from Freepik