Bigtechs vs Banks: APAC Consumers’ Trust in Financial Services Shiftsby Fintech News Singapore January 10, 2023
In Asia-Pacific (APAC), banking customers are demanding better online experiences and showing willingness to share their personal data if that means being provided with personalized products and services. Customers are also demonstrating increased trust in bigtech companies to fulfill their banking services, with some even stating that they would trust a bigtech firm more than they would a traditional bank.
These are some of the findings revealed by a new APAC-focused study conducted by business and technology management consultancy Capco. The Bank of the Future survey, released in November 2022, polled 4,800+ respondents in Singapore, Hong Kong, Greater Bay Area (excluding Hong Kong), Thailand and Malaysia during September and October 2022 to understand consumer expectations and attitudes to financial services in the region.
Results from the study show that retail banking in APAC is undergoing a profound transformation, driven by changing customer behavior and preferences.
In particular, APAC banking customers were found to be avid mobile users, with mobile devices emerging as the preferred access tool in most jurisdictions. Three-quarters of all respondents indicating accessing banking services using mobile phone apps, with usage being the highest in Thailand at 85%, followed by Singapore at 81% and Malaysia at 75%.
Room for improvement
High levels of online and mobile usage are fueling consumer demand for improvements, the study found, with eight in ten respondents across APAC sharing that they wanted a better online experience from their banking provider.
In Singapore, customers named easier and clearer navigation (59%), mobile apps (51%), and face identification and fingerprint logins (46%) as the top three improvements they would most like to see. The study also revealed that across APAC, customers are now demanding tailored products, showing high willingness to share their personal data to gain access to personalized offerings.
In a video interview series by Fintech New Singapore, industry experts agree hyper-personalisation is a crucial strategy for banks to remain competitive against the rise of bigtechs.
Openness to data sharing was found to be the highest in Thailand where 51% of respondents said they would be “definitely” happy to share more personal data to get personalized products and services, followed by the Greater Bay Area (excluding Hong Kong) at 29%, and Malaysia at 28%.
Bigtech companies gain trust
APAC banking customers also shared their preference for having all of their financial services in a single place, favoring an “all-in-one” approach over dealing with a collection of specialist providers.
In Singapore, 59% of respondents indicated preferring “all-in-one financial services”, a trend that was echoed by a similar ration of consumers in Hong Kong. Thai respondents, meanwhile, leaned even more strongly towards the “all-in-one” approach with 76% of respondents saying they preferred accessing their financial services through one portal.
Across APAC, consumers are also increasingly comfortable using fintech solutions and digital financial services provided by non-traditional players, the study found. Of the 4,800+ individuals polled by Capco, eight in ten said their confidence in using mobile and digital banking services had grown over the last two years. In fact, six in ten respondents even said they would now trust a bigtech firm more than they would a traditional bank to fulfill banking services.
That vote of confidence in digital challengers was most pronounced in China’s Greater Bay Area (excluding Hong Kong) where 77% of consumers asserted they would trust a bigtech company more than a banking incumbent.
The rise of digital banking
Changing customer behaviors and expectations in APAC come amid the rise of digital challengers in the region’s retail banking space. These past few years, financial regulators in jurisdictions like Hong Kong, Singapore, Malaysia and the Philippines have awarded digital banking licenses to new entrants in a bid to increase competition and encourage innovation. Several of these offerings have already launched, including GXS Bank and Anext in Singapore, as well as Tyme Bank and Maya Bank in the Philippines, and are expected to shake up the industry.
In 2021, APAC was home to 68 digital banks, according to a report by Swiss digital banking tech provider Banking, Payments: Context (BPC) and Dutch fintech consultancy firm Fincog. These players started witnessing significant customer attraction in 2018, amassing a total of 437.2 million customers in 2021.