As Singapore's retail banks adapt to a rapidly digitalising world, they must reimagine traditional banking models to keep pace with evolving customer expectations. Jeremy Soo, Managing Director and Head of Consumer Banking Group at DBS Bank and IBF Fellow, explains that the future lies in a new synergy between online and offline banking.
To succeed, retail banks in Singapore must keep up with an increasingly digitalised world and the rapidly changing customer expectations that come with it.
A range of innovative Fintech start-ups have changed the game in the financial services industry. Many of these start-ups have introduced new service models to the banking industry, which has changed what consumers expect from a retail bank.
For example, Singapore-based CoinPip is skipping the need for a retail bank by normalising bitcoin payments for Singaporean businesses, and MoolahSense offers an alternative to bank financing with a crowdfunding platform that connects SMEs directly to investors.
To stay relevant in the light of these new services, retail banks in Singapore must reimagine their business models and adapt to a rapidly evolving financial services market that now demands more than traditional banking services.
Becoming more than a bank
There are examples of this model at work in the region. China’s ICBC operates an e-commerce site and extends lending programmes to its account holders so they can pay for expensive retail products in instalments.
So, if Chinese consumers can go to their bank to buy the latest designer handbag, what does the future of retail banking look like in Singapore?
Soo believes Singapore’s banks will need to do more than simply sell goods online to compete with nimbler Fintechs.
“The key learning here is that the Fintechs are able to provide a very good customer journey that in many cases has disrupted the industry,” he says. “To compete, banks must change their DNA.”
Soo points out that banks hold a competitive advantage over online-only Fintechs thanks to their existing brick-and-mortar branches. To leverage this lead, he believes retail banks must embrace a new synergy between online services and physical branches to deliver a superior customer experience that is more integrated into the daily lives of Singaporeans.
“Branches will be used to support digital banking and become a place where you meet for social interaction,” he explains. “In the course of that interaction, products and services relating to a bank will be consumed, but only if they are embedded in a way that adds value to the customer journey.”
Reinventing the physical branch
DBS is already experimenting with this idea, reimagining its Plaza Singapura outlet. More hip cafe than traditional bank branch, customers can sip barista-made coffee, use Wi-Fi while working or surfing social media at a communal table, and access video teller machines that are managed centrally from the bank’s 24/7 call centre.
“This video interface is important for retaining a human connection between bank staff and customers,” says Soo. “It also means these branches will be open 24/7 and will allow us to be part of the customer journey when they go for their coffee break. If they also choose to do their banking, the services will be there.”
“The important lesson here is that with these technologies, we are able to fundamentally rethink the journey for our customers.”
Adapting to customer journey thinking
The shift to customer-centric journey thinking will also demand changes in the way banking professionals approach their roles.
While the underlying principles shared by bankers, such as a strong commitment to fiduciary responsibility, will not change, Soo stresses that industry professionals must develop extra skill sets to succeed in a new retail banking environment.
He explains: “To deliver on this journey thinking, banking professionals will need to develop new knowledge around cloud computing, data analytics and customer journey mapping – all of which will be critical to a bank’s ability to provide the best customer experience.
“We must all learn to embrace and integrate this new thinking into our lives, otherwise it will be very difficult to win in this game.”
One way to do that is with the Learn@IBF App. It is a mobile micro-learning platform that empowers banking professionals to develop future-enabled skills such as digital awareness, data-driven decision making and human-centred design in a series of short 10-minute modules.
Charting the way forward
To take full advantage of these new market conditions, retail banks must transform and move towards a world of banking where services are more seamlessly woven into the lives of customers, whether online or offline. That will require a fundamental reimaging of retail banking business models, in order to provide the new financial services that the new digital consumers demand.
To learn more about how you can learn the skills needed for the future of finance, visit IBF.