Digital banking or the digitalisation of banking services has not only made it more convenient for customers to conduct their banking anytime, anywhere (via mobile phones), it has also improved efficiency across all services, allowing them to make online payments, loan applications, withdraw money and more.
Simply put, digital banking makes life easier for consumers.
The process towards going digital involves digitisation and digitalisation. Digitising is all about converting paper and other physical documents into digital format while digitalising is far bigger. It’s a whole new way of thinking.
Research reveals that customers are now increasingly gravitating towards online-only banks for the following reasons: it’s more efficient (44%); affords greater control over my money (24%); access to easy-to-use mobile apps (22%); lower account costs (18%); and, more personalised (14%).
Simply put, digital banking makes life easier for consumers.
Digital Banking in Asia – The Big Picture
The success of China’s Tencent and Alibaba and India’s Paytm reveals that consumers are willing to procure banking products from tech giants, FinTechs, and digital-only banks.
A recent analysis of APAC retail banks has seen industry-wide performance improvement on digital engagement and conversions leading to a fall in average industry bounce rates, from a high of 45% in July 2017 to 27% in July 2018. It was during this period when banks focused on digitising back-
end processes to expectations from the front-end customer experience.
A 2018 survey by global business consultant McKinsey & Company reveals that Asians from emerging countries like China, Indonesia, Malaysia, India, Myanmar, Philippines, Thailand and Vietnam are shifting toward digital transaction channels. The study also found that 52% of urban bank customers used digital banking services in 2017.
In Singapore, the announcement to issue as many as five new digital bank licences to non-bank firms, is expected to usher in a new era in banking.
Monetary Authority of Singapore Chairman Tharman Shanmugaratnam says that “we welcome firms with innovative value propositions to apply for the new digital bank licences, even if they have not yet established a track record in banking.”
Taking advantage of Singapore’s high internet and mobile subscription penetration rate, standing at 84% and 144% of the population respectively, local banks have launched and continue to improve their mobile banking apps. As a result, Singaporeans are ditching bank visits and opting to go mobile instead.
“In Singapore, the announcement to issue as many as five new digital bank licences to non-bank firms, is expected to usher in a new era in banking.”
According to a recent study, mobile banking usage has overtaken branch visits by 15%. In addition, customers who expressed openness to digital banking, 66% said they will remain with their current bank even if all its physical branches were closed while only 52% indicated they would do so with
an entity outside of the banking sector, perhaps an indication that existing local banks are making headway in their quest to go digital.
On the ground level, there seems to be enough evidence that proves the point that in Asia, local banks are firmly resolved to leap into digital.
Industry Case Studies: HSBC, Maybank, Taishin Bank and Wave Money
Launched in October 2018, HSBC Singapore QuickFX is the first FX-focused mobile app developed by a retail bank in Singapore. It offers a holistic foreign exchange proposition for customers, covering both their transactional and investment needs. The market-leading app enables HSBC customers to leverage on the bank’s FX expertise anytime, anywhere at their convenience.
HSBC QuickFX app integrates the most comprehensive slew of FX solutions in an all-in-one digital platform. These include real-time FX rates round-the-clock, instant global transfers and remittances, automated limit orders and currency conversions, and a unique customisable FX position watch-list. The app also gives customers easy, instant access to their multi-currency account, which is linked to their multi-currency debit card.
Similarly, Maybank in Malaysia launched MAE, a first-of-its-kind e-wallet which allows new or existing users to open an account via their smartphones within 5 minutes and transact instantly, that is also bundled with an instant virtual Visa debit card, without needing to visit a branch, providing them ease of access, saving time and bypassing lengthy documentation submission processes.
MAE’s instant virtual Visa debit card allows users to pay for their shopping on e-commerce apps and websites the very instant the account is opened. Furthermore, users can also add their virtual Visa debit card to Maybank Pay or Samsung Pay to pay for their retail purchases at PayWave-supporting contactless terminals or use the QRPay function to pay cashless at over 200,000 merchants throughout Malaysia.
In Taiwan, Taishin Bank developed Richart with the goal of providing the best customer financial experience through mobile banking. Taishin found that aside from enjoying financial services online through digital channels, customers are also expecting a more convenient and integrated services easily accessible by smartphones and laptop.
As a result, Richart was developed as an open bank and aims to build a digital life circle for customers, providing them with a service that meets all their needs in one versatile platform via the collaboration with cross-industry companies. In addition, Richart also registered the highest online discussion and social impact among Taiwan’s digital bank market.
Not to be outdone, Myanmar’s Wave Money is the largest mobile financial services provider in the country, servicing 10 million customers on average monthly and it has 45,000 Wave shops nationwide.
With Wave Money’s mission to push financial inclusion for all, it signed a partnership with Myanma Economic Bank (MEB) to provide Digital Pension Disbursement Partnership that extended the benefits of a game-changing mobile pension payment system to government retiree nationwide. The main goal of this collaboration is to deliver this service to all government pensioners to access their funds through mobile money easily and conveniently.
Previously, retirees had to wait for an average of 3 hours using their E-pension card to withdraw their pension funds, which is very inconvenient for elderly people. By using this Digital Pension Payment, pensioners can now access funds anywhere, anytime. It also saves time, improves security and provides a means for saving and managing money more effectively than traditional methods.
“Now, more than ever, banks need to evolve.”
Evolve or else
The examples above are just but a few of the many developments happening in the region. To get ahead in the future, banks need to truly embrace digital business and not just digitalise processes. This involves the use of intelligent automation, open APIs and cybersecurity. Banks must rethink the customer value proposition by using platforms that utilise customer data in a manner that leads to better customer engagement and offerings. Now, more than ever, banks need to evolve.