Digital banking transactions soar amid restrictions on movements

Singapore

WITH the wide curbs on movement and the push to work from home amid the Covid-19 pandemic, more consumers here are turning to digital banking.

Singapore's largest bank has numbers to show for this. Over the first three months of this year, DBS saw a S$8 billion increase in value of transactions conducted digitally, compared to the same period last year. The bank now expects one million of its customers to go "fully digital" by the end of 2020 - rolling forward an initial projection by a year.

DBS, which serves 5.3 million residents in Singapore, counts those who have not visited a physical branch for the last 12 months as "fully digital" customers.

Much of this spike was driven by safe distancing measures implemented to reduce community spread of the novel coronavirus, said DBS' head of consumer banking Jeremy Soo. His team saw more than 100,000 customers making their debut digital transactions from January to March, out of which almost a third, or close to 30 per cent, are above the age of 50.

"The pandemic is a catalyst for the change (in customers' banking habits), but we are optimistic that this customer base will continue to embrace online banking," Mr Soo told The Business Times in an interview.

To add, 90 per cent of DBS' non-cash services - these exclude cash withdrawals, deposits, and cheque encashments - can now be done online, including higher value transactions such as signing up and refinancing mortgages. This is critical as banks in Singapore have shut about half of their total branches amid tightened safe-distancing measures.

In the next few months, DBS will also look to allow joint accounts to be set up digitally in a more seamless manner. The bank is also working to enhance ways to authenticate digital users.

Mr Soo added that while DBS has seen a reduction in cash volume over the years - at an average of about 5 per cent year-on-year since 2017, totalling S$15.6 billion - it saw a record 11 per cent slide, year-on-year, thus far for 2020.

This unprecedented drop in cash volume amounted to over S$2 billion by the end of March.

"We also foresee that (contactless transactions) may potentially displace cash transactions with consumers being more conscious about hygiene, particularly for those 50 years and above," he said.

Concerns have been raised across the world over the safety of handling banknotes and coins amidst the virus outbreak. For instance, China, which has reported over 82,200 Covid-19 cases, had said in February that the country's banks will use ultraviolet light to disinfect yuan bills, then seal and store the cash for up to 14 days, before recirculating them.

And while the World Health Organization has not issued any warnings on the use of cash, it has reiterated the importance of hand-washing, including after handling money.

The authorities in Singapore have not sounded alarms over the use of cash, but financial institutions have been dangling incentives to encourage people to go cashless, in the country's effort to promote safe distancing.

A suite of "circuit breaker" measures came into effect here on April 7, with all schools and most workplaces, except those providing essential services or are in key economic sectors, ordered to shut temporarily - at least until May 4.

Singaporeans have also been asked to stay in their homes as much as possible, and can leave only for essential activities, such as buying food and groceries.

While financial services are considered essential, the Monetary Authority of Singapore said it expects financial institutions to provide as many basic financial services as possible through digital channels that do not require clients' physical presence. Most banks have also closed some branches in anticipation of reduced footfall during this period.

DBS has temporarily closed 29 of its 57 branches. Despite the higher volume of transactions, the bank has not been inundated with higher call volumes, said a DBS spokesperson.

She said that its digital banking services saw abnormally heavy traffic on Tuesday - the same day the government disbursed payouts of at least S$600 to millions of adult Singaporeans as part of unprecedented government relief.

Customers may have encountered "some intermittent delays", but this was likely a one-off event, she said.