Singapore Organizations Adopt AI, ML Amid COVID-19 Induced Uncertainties

Singapore Organizations Adopt AI, ML Amid COVID-19 Induced Uncertainties

by October 21, 2020
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Amid the COVID-19 pandemic, Singapore businesses are turning to artificial intelligence (AI) and machine learning (ML) to manage consumer credit risk and deal with economic uncertainties, according to a new research by information services company Experian.

Experian, which surveyed 3,000 consumers and 900 executives working in retail banking, e-commerce, consumer technology and telecommunications, found that COVID-19 has accelerated adoption of digital solutions.

Singapore organizations in particular are embracing AI and ML at a much faster pace than their international peers, with 78% of organizations already using AI to cope with today’s marketplace unpredictability while 79% are leveraging ML. These are higher than the global figure of 69%.

S&P Global Ratings estimates that Asia Pacific (APAC) financial institutions will be hit with US$1.4 trillion in additional nonperforming assets and additional credit costs of about US$440 million as risks associated with COVID-19 and market volatility take hold.

Against this backdrop, 25% of Singapore-based respondents are planning to use on-demand cloud-based decisioning applications, policy rules (25%) and automated decision management (24%) to help them effectively determine which consumers can be safely given extended credit. Over the next 12 months, 69% will be allocating resources towards building their analytics capabilities to assess customer creditworthiness, the survey found.

Online shopping and e-commerce on the rise

Singaporean businesses’ willingness to invest in and adopt digital solutions comes at a time when consumers are demanding better digital-first experiences. A research conducted in June by market research consultancy Blackbox and survey firm Toluna found that while consumers spent more online during the pandemic, about four in ten Singaporeans said they were not satisfied with their e-commerce experience, noting that delivery costs, product prices and delivery time could be better improved.

That being said, global marketing research firm Nielsen expects the penetration of users venturing into e-commerce to continue to rise. Nielsen’s COVID-19 dipstick in March 2020 found that 69% of Singaporean people surveyed who bought household goods online for the first time during COVID-19 will do so again in the next 12 months.

Similarly, Standard Chartered, which polled 12,000 consumers across 12 markets in August 2020, found that, amid COVID-19, Singaporean consumers that prefer online purchases to in-person card or cash payments increased to 50%, up from 35% before the pandemic.

Changing spending habits

Globally, the COVID-19 crisis and its ramifications have disrupted markets and deteriorated the health and economic welfare of consumers. In Singapore, 23% of respondents still face challenges in paying credit card bills, while 20% are encountering difficulties paying their utility bills, the Experian research found. This has prompted many consumers to rethink their spending habits, shifting to essentials and cutting back on most discretionary categories.

In Singapore, consumers are taking steps to manage these financial challenges by reducing their expenditure on non-essentials (22%), saving more (22%), and starting a personal budget (17%), the study found.

According to the Standard Chartered survey, consumers in the city-state are spending about 15-52% more on groceries, digital devices and healthcare, but spend less on clothes, experiences and travel or holidays.

Almost eight in ten respondents in Singapore said they would like to be better at managing their finances, and six in ten said the pandemic has made them more likely to track their spending. Most of the respondents are either user or interested in using budgeting as well as finance tracking tools.

Jeremy Soo, head of consumer banking at DBS Bank, told Fintech News Singapore in September, that, amid COVID-19, people were starting financial planning earlier. Since the bank launched its new digital financial planning tool, NAV Planner, back in April, over one million customers had used it, Soo said.

 

Featured Image: Pexels

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