The current state of digital banking in Singapore

The growth of mobile and open banking, the desire for real-time communication and customized services, as well as new laws, are all contributing to the complexity of the banking sector. There is now an unprecedented level of rivalry among banks and financial services companies as a result of the desire for improved experiences across channels.

Here are six predictions for digital banking Singapore from SmartOSC Fintech, along with seven graphics.

More Banks to Partner with Fintechs

Banking as a Service (BaaS) partnerships between banks and businesses will continue to let non-bank third parties provide banking services for digital banking Singapore. For instance, HSBC and software company Amount collaborated to develop a digital lending platform in August 2019. 

By launching services like in-store mobile phone payment systems or providing nonbank money transfers, financial technology businesses have been upsetting traditional banking and pressing institutions to rethink banking offerings. Financial technology firms are demonstrating that customers embrace these developments.

Adoption of Neobanks

In 2020, traditional banks will face competition from neobanks as more clients gravitate toward the ease of digital banking Singapore. A neobank is an online or mobile-only financial institution that doesn’t have any physical premises but offers its customers basic financial services, including checking and savings accounts and money-transfer options.

With their cost-effective structures (no monthly fees, no withdrawal or overdraft costs), along with providing individualized customer experiences, neobanks are strategically aiming their marketing at the unbanked population and tech-savvy millennials.

The AI Evolution Continues

Banks are increasingly turning to AI, despite its relatively slow adoption, to enhance their business processes and client interactions through chatbots and fraud- and risk-detection tools. The economic value of artificial intelligence in digital banking in Singapore will reach $300 billion by 2030, according to an IHS Markit estimate from April 2019. 

Between 2019 and 2023, North America is anticipated to grow to be the industry’s largest market for AI in banking, reaching $79 billion. Between 2024 and 2030, however, Asia-Pacific, Europe, and other international areas will introduce more AI solutions in the banking industry.

In 2023, it’s anticipated that 79% of chat-driven customer interactions will occur in mobile banking apps. According to the research firm, this is due in part to consumers’ growing preference for banking through mobile apps.

Revitalizing Blockchain Technology

Blockchain technology acceptance and investment are increasing gradually but steadily as the financial sector continues to develop beyond the usage of digital banking Singapore. This is because blockchain enables decentralized data storage. This implies that asset transparency will increase and transactions will be safer.

Financial institutions are currently implementing blockchain technology at various levels. According to PwC statistics from June 2019, 37% of global financial institutions said that they offered their consumers fintech-based goods or services when questioned about the use of cutting-edge technology, such as blockchain and AI.  

Voice Banking Takes off

Banks will profit from the use of voice banking services as individuals get increasingly used to utilizing voice assistants for search and task completion. Consumers can instruct a voice-enabled device to check account balances or pay bills, as two examples of use cases. 

Voice banking offers significant growth potential with consumer education, even if usage is currently highly skewed toward younger demographic segments and there are certain challenges including security and privacy concerns.

Conclusion

Competition for digital banking Singapore at the beginning of 2022, and there, startup banks like Monzo, Revolut, and N26 have arisen, boosting the level of competition. Younger customers who don’t necessarily require banks with physical facilities are seeing the emergence of a number of new “neobanks,” or direct banks with a digital foundation.

If you are looking to develop a competitive digital bank, contact SmartOSC Fintech immediately.