50 years ago, Singapore was confronted with severe unemployment, poor infrastructure and a housing shortage. Fast forward to today and the city-state is ranked as one of the most livable cities, its economy is stable and its banking sector is about to be shaken up.
Singapore has traditionally relied on legacy banking models with a long-term emphasis on three large banking institutions but recent top-down changes across the financial services landscape are about to level the playing field. Set to begin in mid-2021, virtual banking will allow consumers to perform critical banking activity remotely from their personal devices and engage with emerging non-banking financial organisations. It’s expected to offer consumers greater access to, and control over their finances, and transform existing financial behaviour to boost purchasing patterns, and in turn the economy.
Onboarding to get smarter
At present, traditional banking onboarding processes in Singapore are grounded in lengthy set-up and verification processes. Often, consumers wanting to open bank accounts or make account changes are required to physically visit bank branches to satisfy identity verification protocol. This can be cumbersome and time-consuming, particularly for consumers based in remote areas with limited access to transport. Virtual onboarding will remove the complexity and inefficiencies of traditional processes, empowering consumers to set up financial accounts virtually and seamlessly.
Singapore’s fintech ecosystem is thriving with consumers already reaping the benefits which the innovations have delivered such as greater flexibility and access to additional products and services. An example is Singapore’s OCBC Bank’s partnership with digital personal information manager MyInfo, which offers consumers the ability to instantly and virtually apply for critical banking products like credit cards, debit cards, and loans. Today, 35 per cent of OCBC account products are opened through MyInfo. To offer the most efficient and secure services, these tools are underpinned by robust digital identity management solutions which can verify users’ identities and enforce account security removing the need to visit a physical branch. These capabilities will promote higher rates of onboarding which in turn will drive greater levels of online financial activity.
Virtual banking will also provide consumers with highly personalised experiences. This can include making suggestions around personal and home loans based on consumers’ incomes and savings strategies, or offering breakdowns of past spending patterns to provide highly curated budgeting suggestions. The impact of personalisation is significant, with trends indicating that consumers are more likely to appreciate customised experiences, and purchase more from brands that offer personalised services. With advanced digital capabilities, virtual banking will provide highly personalised online experiences to consumers in a way traditional banks can’t again improving accessibility and customer satisfaction.
More insights signal greater autonomy
As consumers engaging with virtual banking are set to gain more financial independence and control, they’ll also be able to engage in more confident and well-informed financial activity. The ability to seamlessly view real-time financial data will promote strong budget strategies among consumers, and increase healthy purchasing patterns. Virtual banking is expected to influence decisions around the payments and deposits consumers make, the loans they apply for, and their overall financial health. This will positively impact various market segments, for example, higher rates of home loan applications will strengthen the housing market. In the long run, more financially secure consumers will contribute to a stronger local economy, and raise Singapore’s presence in the global market.
However, concerns around security often accompany online information management. In today’s connected age, many consumers are already wary of the security of their digital identities, particularly when it comes to their personal and financial data. Increasingly, consumers want more transparency into the relationships they have with their financial providers, and will prioritise trust and security. Anxieties around virtual banking environments and non-traditional banking providers are valid but intelligent authentication and biometric verification technology can allay those concerns and ensure virtual banking processes are safer and more secure than ever before.
Virtual banking is set to transform the Singaporean economy by placing newfound power into the hands of consumers. And intelligent identity management solutions will underpin the rapid growth of this space to ensure consumers’ online financial experiences are secure, consensual and seamless.