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2 in 3 Singapore bank customers keen to try digital banks: poll
BANK users in Singapore, led by younger customers, welcome the entry of digital banks, according to a study consultancy firm JD Power released on Thursday.
Overall, nearly two-thirds (65 per cent) of customers are interested in opening digital bank accounts in 2019, compared with 52 per cent last year.
Some 70 per cent of younger customers - those born in or after 1980 - are willing to use digital banks, while 59 per cent of the rest of the customers are open to digital banking.
For non-branch users, 64 per cent are willing to use digital banks, about the same as regular branch users, of which 66 per cent are willing.
This disruption is likely to spur traditional banks to up their game in meeting evolving customer needs, said JD Power.
The study also found that nearly half of customers (47 per cent) have multi-account programmes, which are special saving programmes that give customers extra interest when they credit salaries to their bank accounts, and use other bank services such as credit cards and bill payment.
"These accounts enable banks to attract new funds, but more importantly provide ways to deepen relationships with their customers," JD Power said.
"However, 23 per cent of customers with these accounts are likely to switch their primary bank for better interest in the next 12 months, compared with 14 per cent of customers who are not using multi-account programmes."
JD Power added that this brings into question whether the move by banks to increase customer loyalty is achieving its purpose.
The 2019 Singapore Retail Banking Satisfaction Study also found that 76 per cent of customers believe that knowing overall customer satisfaction ranking is important when choosing a primary bank.
Meanwhile, the use of mobile banking apps has increased to 65 per cent from 53 per cent in 2018, versus Hong Kong's 43 per cent adoption rate.
Advancement of digital channels also means fewer human interactions with customers, resulting in 29 per cent of customers feeling they have a close relationship with their banks.
Customers’ satisfaction with their primary bank decreased marginally to 749 (on a 1,000-point scale) in 2019 from 755 in 2018.
Out of the eight banks in the study, HSBC ranked highest in retail banking customer satisfaction with a score of 769, and scored highest in three - product offerings, fees and problem resolution - out of six study factors. The other three factors are account activities, account information and facility.
OCBC ranked second with a score of 764 and DBS ranked third with 752. POSB, Standard Chartered, Citibank were mid-table, while UOB and Maybank trailed in seventh and eighth position respectively.
The study polled 2,515 retail banking customers in May to June 2019 on their satisfaction with products and services provided by their primary financial institution.
Other key financial markets that JD Power conducted the study include Australia, Canada, China, Hong Kong and the United States.
"Customers are the winners when they have more choices," said Anthony Chiam, regional practice leader, global business intelligence at JD Power.
"On average, customers in Singapore have about five accounts, which include transaction, savings and deposit. If banks build relationships and help customers navigate financial planning complexities, they will benefit from the lifetime value of the customer."