Trust, Security and Innovation Critical for Long Term Success of Financial Industry
Qinthara Fasya | 22 July 2021
- 68% of Singaporeans in VMware Digital Frontiers 3.0 study are happy to keep interacting digitally with financial services firms – the highest amongst its Southeast Asian counterparts
- 88% of Singapore consumers surveyed are embracing contactless payment, but key
challenges remain: security is the number one priority for 84% of Singaporeans in choosing a financial services provider yet only 56% trust financial services firms in protecting their data
- Singapore’s financial ecosystem needs to create a secure digital foundation to accelerate innovation as consumers place high trust in technologies of the future including artificial intelligence (70%), 5G (74%) and facial recognition (76%)
Consumers in Singapore are most receptive to digital experiences that the financial services industry has to offer, as compared to organizations from the retail, healthcare, government, and education sectors. However, creating a more robust and secure digital foundation is critical for the financial services industry to reap the full growth potential of its digital transformation efforts, according to VMware, Inc. (NYSE: VMW). The VMware Digital Frontiers 3.0 Study found that 68% of Singaporeans are happy to interact digitally with financial services firms, leading Malaysia (66%), Indonesia (58%), Thailand (61%) and the Philippines (63%). However, less than half of respondents (44%) are excited by digital services delivered by financial services firms, highlighting an opportunity to harness cutting-edge innovations to delight consumers.
The battleground for Singapore’s financial services industry has moved online, with 51% of Singaporean respondents now preferring to engage with their banks via apps rather than visiting in person at a branch. While mobile wallets and e-payments have become prevalent in Singapore with 88% of consumers surveyed shifting their preference from cash to contactless payment, only 27% of Singaporeans would let an app help make investment decisions over an individual that works for a bank. This is significantly lower than the other surveyed Southeast Asian countries: Malaysia (35%), Indonesia (49%), Thailand (56%) and the Philippines (36%).
As financial services organizations continue to accelerate innovation to gain a competitive edge, it is important for organizations to prioritize the core fundamentals that enable great digital experiences for consumers: a high level of security and protection of consumer data (68%), ease-of-use across all devices (47%) and applications that deliver services simply and effectively (45%). Singapore’s financial services industry has performed well on the whole, with 54% of consumers surveyed stating financial services organizations delivered better digital experiences last year compared to retail, healthcare, government, and education organizations.
“While COVID-19 has significantly changed the customer battleground for many industries, it has also presented exciting opportunities for Singapore’s financial services industry. As new disruptors have risen in the past years, banks in Singapore have also geared up and accelerated their digital transformation efforts to compete better against these new challengers,” said Adrian Hia, Country Manager, VMware Singapore. “To stay relevant and remain competitive, it has become an imperative for financial services organizations to create a robust digital foundation and tap on cutting-edge innovations such as Cloud to accelerate innovations and respond faster to consumer needs. Beyond this, a robust and connected digital foundation will also enable organizations and the government to build a financially inclusive ecosystem. This will in turn help Singapore emerge stronger as the nation drives towards economic recovery.”
The future of finance is virtual in Singapore
Over the last year, consumers in Singapore have gained a better appreciation of the value of digital products and services, with 55% of respondents stating that digital engagements with financial services organizations have freed up their time to focus on other priorities. Consumers are also embracing emerging technologies more, with more than two-thirds (70%) of respondents expressing trust in artificial intelligence – at par with Southeast Asia’s average of 70%.
In a sign that digital engagement models will become the norm for Singapore’s financial ecosystem, the study also found that Singaporeans surveyed are relying on their smart devices more, with 60% of respondents stating that their phones are now more important than their wallets when conducting financial transactions.
Technologies of the future show promise, but security and trust are still foremost concerns
Consumers in Singapore are showing willingness to embrace next-generation technologies with 76% of those surveyed expressing trust in facial recognition technologies and 5G (74%). When it comes to technologies of the future, consumers are optimistic about the impact on their digital experiences, with more than one-third (38%) of respondents believing that 5G can make banks more efficient, enabling them to process applications and credit checks faster.
Despite the optimism in emerging technologies, security takes precedence for 84% of Singaporeans surveyed when choosing a financial services provider. This is higher than the other surveyed countries in Southeast Asia: Malaysia (80%), Indonesia (79%), Thailand (83%) and the Philippines (83%). With only 56% of Singaporean respondents trusting the financial services firms in securing their personal data and information, this is an urgent call for the financial services ecosystem: deliver not only cutting-edge innovations, but also secure and privacy-focused digital experiences to win the trust of Singaporean consumers.
Growing demands for an ethical and inclusive financial ecosystem
While Singapore’s digital journey has been positive with 67% of consumers surveyed defining themselves as “digitally curious” or “digital explorers,” Singaporeans are increasingly focused on more than just digital experiences when choosing their financial service providers. At least one in two consumers (57%) surveyed look to reduce their carbon footprint by using more digital services. 81% of respondents are also expecting technology to advance financial inclusion within the next decade.
“DBS has been at the forefront of delivering intelligent, intuitive and invisible banking solutions to customers in our key markets. With Covid-19 greatly accelerating the adoption of digital behaviours, we have observed strong traction in the new digital banking technologies and solutions that DBS has rolled out over the past year, including hyper-personalized services powered by AI and facial biometrics for speedy and secure information authentication. Going forward, DBS will build on our strong partnership with technology partners such as VMware as we continue to innovate and deploy relevant digital banking solutions to shape the future of banking,” said Jimmy Ng, Group Chief Information Officer and Head of Technology & Operations, DBS.
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