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Incumbent banks are battle-ready for competitors
BANKS in Singapore are in good shape to be able to defend their turf, even as the financial sector is being liberalised in this digital age.
So said Ong-Ang Ai Boon, the executive director of the Association of Banks in Singapore (ABS), noting that banks have not been taking things "sitting down".
"We do not want our lunch to be eaten," she said.
This comes as the banks have seen some success in getting quick payments via mobile numbers off the ground. In 2017, major retail banks in Singapore launched a peer-to-peer transfer service that promised a seamless way to split the bill or make home-tutor payments a breeze using mobile numbers.
This was PayNow, a service that effectively turned the mobile number into a unique identifier of a banking customer, which is more efficient than using a banking account number as an identifier. The round-the-clock service is free.
By July this year, the number of PayNow transactions crossed five million, up significantly from just 150,000 when it was launched two years ago. In that period, the value of monthly transactions also grew from about S$24 million to more than S$1 billion.
The service has since been extended to corporate customers. PayNow Corporate was launched in August 2018. Since then, more than 115,000 unique entity numbers - company registration numbers - have been registered for PayNow Corporate. Banks in Singapore have also worked on ensuring that their services meet customers' demands for a better service experience.
ABS has worked as well with the regulators to ensure that the banks are adhering to high cybersecurity requirements, so that customers continue to trust that the banking system is very secure, Ms Ong-Ang said. ABS recently established guidelines such that financial institutions can effectively set out "adversarial attack simulation exercises", which simulate highly sophisticated targeted attacks against an organisation. Such exercises would help to prepare these organisations to, among other things, improve their response readiness.
Mrs Ong-Ang said the greater "inclusion" of non-banks is to be expected, as fintechs are soon able to access the real-time payments system network in Singapore.
But she is confident that the incumbent banks are ready for the competition. "We don't want to be disrupted."