Singapore sees largest rise in digital investments among financial institutions: survey

SINGAPORE saw the largest rise in digital banking investments in response to Covid-19, as financial institutions dole out bigger budgets to boost their digital offerings, a recent global study by Finastra showed.

In line with the rapid shift towards digital services last year, nine in 10 of those surveyed globally said the pandemic had accelerated the integration of new technology and innovation.

In Singapore, this translated into the largest average increase in digital banking investment of any market (25 per cent), and the highest proportion of respondents globally noting their bank had increased overall investment/budgets (84 per cent).

Adapting to fresh challenges brought about by Covid-19 was the third-biggest driver of the adoption of technology (47 per cent), just behind cost-cutting and efficiency (54 per cent) and business growth (48 per cent).

Almost half of those surveyed in Singapore deployed or improved their banking-as-a-service capabilities in the last year, with 45 per cent looking to do so in the next 12 months, higher than in any other market surveyed.

Still, a few key barriers to innovation persist.

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Nearly 60 per cent of those surveyed in Singapore said management or decision makers are "stuck in old ways of thinking", while more than half also cited cost of development and tight industry regulations.

With the issuance of digital bank licences and the launch of SGFinDex last December, open banking has also become important to 97 per cent of businesses in Singapore, with more than half calling it a "must-have".

"Through initiatives like banking-as-a-service and open banking, financial institutions in Singapore are laying the foundations for truly open finance, enabling banks to level up their technology capabilities like never before and provide ever more innovative and competitive services," said Luc Hovhannessian, Asia-Pacific managing director at Finastra.

The survey was conducted in March 2021 among 785 professionals at banks and financial institutions across Singapore, Hong Kong, US, UK, France, Germany and the UAE.