Banks in Singapore must put the customer at the heart of their innovation efforts and deliver integrated propositions that address core customer needs, and in turn, capture customer mindshare and trust

 The replacement of in-person branch interactions with impersonal digital transactions through online and mobile channels during the COVID-19 pandemic has accelerated the ongoing erosion of consumer trust in banks, according to a new report from Accenture (NYSE: ACN).

Accenture’s 2020 Global Banking Consumer Study, based on a survey of more than 47,000 consumers globally, of which 2008 are from Singapore, builds on two similar reports from 2019 and 2017. The latest report reveals that without a strong emotional connection with their bank, customers are more likely to view banking services as a commodity, with price being the ultimate competitive differentiator. Specifically, over four in 10 Singaporean consumers (43 percent) ranked value for money as a top three factor, making it the most important factor when dealing with a bank.

While banks often view broader digital adoption as a way to lower costs and provide services 24/7, the rapid pivot to existing and hastily launched digital services has all but removed the vital human element from banking, further eroding consumer trust. For instance, less than one in three Singapore respondents (29 percent) trust banks “a lot” to look after their long-term financial well-being, compared to 41 percent two years ago.

“Many customers view financial matters as highly personal and here is where trust will be a critical differentiator,” said Paul Ng, Financial Services Lead, Southeast Asia at Accenture. “While the recent shift to digital has afforded consumers convenience and accessibility, banks cannot lose sight of what is truly important—the authentic, trusted relationship with their customers. With the rise of challenger banks and fintech firms in this region, banks must bring a more human and collaborative focus to their digital interactions to forge stronger customer connections.”

When asked how much they trust their bank to look after their data, fewer than four in 10 (37 percent) said “a lot”. However, the report also found that more than half (56 percent) of Singapore consumers believe that when providing advice, their bank has their best interest in mind “always” or “most of the time,” and 63 percent believe that the advice is smart, personalised and well-informed.

These factors likely contribute to why 27 percent of Singapore consumers believe that banks are in the best position to provide them with products and services outside of their core areas of expertise, compared with only 19 percent, 15 percent, and 12 percent of respondents who said the same for tech providers, social media companies and neobanks, respectively.

Permanent behavioural shift or pandemic-inspired fad?

The report suggests that banks need to evaluate how consumer behaviour has been affected by the pandemic and determine which behaviour changes are permanent, including the growing popularity of video calls. Prior to COVID-19, only 25 percent of Singapore consumers had spoken to a bank advisor via video call. Moving forward, however, 57 percent said that they would be willing to speak with a bank advisor via video calls when branches reopen, with nearly half (48 percent) saying they would prefer video calls to face-to-face meetings.

However, banks need to understand how different channels affect consumer trust. For instance, when receiving advice on products and offerings, only 35 percent of consumers said they would trust a human advisor “a lot” delivering advice over a video call. This compares with 48 percent if a human advisor were delivering advice in person.

“Banks must embrace how evolving consumer behaviours driving change and create digital tools that add relevance and personality into each interaction with the ability to swap in a human advisor at the right moment,” Alan McIntyre, Senior Managing Director, Banking, Accenture, said. “The right approach will balance human and machine interactions, blending the convenience of more personalised digital interactions with human assistance when needed to create more value. This would go a long way toward reinforcing banks’ relationships with their customers, which in turn can build trust, loyalty and benefits for both.”

Evolution of switching

The report found that bank-switching behaviours, once a real-time indicator of increased competition or unhappy customers, have changed over the past two years. Primary account switching activity has decreased significantly, with just 3.5 percent of Singapore consumers saying they switched their primary bank account in the past 12 months.

Measuring switching has become more complex as consumers supplement their primary bank account with additional accounts that serve specific purposes – resulting in multi-banked customers. In fact, the recent introduction of digital banks in Singapore might accelerate this trend of multi-banked customers, while reducing bank switching.

“We expect to see more Singaporeans become multi-banked customers, especially as both incumbent and digital banks evolve their service offerings to better meet customer needs. This presents an opportunity for banks to adopt an agile and proactive approach to deliver innovative products and services that add value to customers’ lives. Banks can also leverage partnership opportunities across the financial ecosystem to deliver relevant and personalised products. Ultimately, banks that surface as leaders will be those that put the customer at the heart of their innovation efforts. By drawing on data-driven customer insights, they will deliver integrated propositions that address core customer needs, and in turn, capture customer mindshare and trust,” concluded Paul Ng.

The full report can be accessed here.

Methodology

Accenture surveyed 47,810 respondents across 27 countries: Australia, Belgium, Brazil, Canada, China (including Hong Kong), Denmark, Finland, France, Germany, Ireland, Israel, Italy, Japan, Malaysia, Mexico, the Netherlands, Norway, Russia, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, United Arab Emirates, the United Kingdom and the United States. Respondents were required to have a bank account and covered multiple generations and income levels. The survey was conducted online during July and August 2020. In Singapore, there are 2,008 respondents.