Digital Transformation in Banking: What getting it right means for consumers in Asia
Research by
Agenda
• Banking channel usage trend across Asia
• Payment tool trends in Asia
• Fraud issues in Asia
• Customer satisfaction and churn
Methodology of study
Annual global surveys of consumer banking attitudes and behaviors.
Online study with sampling balanced by country demographics.
Covers retail banking, payments and wealth management.
GlobalData Banking & Payments Survey sample 2018 Q1
China 2,000 Philippines 5,000
Hong Kong 2,000 Singapore 2,000
India 2,000 Taiwan 500
Indonesia 500 Thailand 500
Japan 500 Vietnam 500
Malaysia 1,000
Total Asia 16,500
Global survey 51,000
Banking & Payments Surveys 2018/2017.
Bank channel trends
5,9%
7,4%
8,4%
6,4%
5,0%4,7%
0%
2%
4%
6%
8%
10%
12%
2013 2014 2015 2016 2017 2018 2019 2020
Year
on
ye
ar g
row
th,%
Credit card balances outstanding Personal loans balances outstanding
Residential mortgage balances outstanding Retail deposits
Retail banking
balances
Growth expected across most retail banking lines of business
Capturing this new business requires investment in growth channels
Retail bank balance sheets across Asia (ex China, India, Japan)Source: GlobalData Retail Banking Analytics
Digital Asia
Online banking use has remained consistently high
Mobile has risen to a close second
Banking is already digital across most of South East Asia
34,4% 34,4%
27,17%29,83%
19,9%
27,3%
17,6% 17,6%
12,3%14,0% 12,8%
16,1%
46,8%
27,3%
47,83%
25,23%
48,1%
28,4%
37,6%
21,4%
39,0%
18,5%
46,8%
19,6%
0%
10%
20%
30%
40%
50%
60%
Weekly ormore
Monthly Weekly ormore
Monthly Weekly ormore
Monthly
2016 2017 2018
Ban
kin
g ch
ann
el u
se a
ccro
ssA
sia
Pac
ific
, %
Branch Telephone Online Mobile
Source: GlobalData Banking & Payments surveys
6,9%
11,5%
15,2%
15,4%
11,5%
35,3%
29,4%
30,4%
16,2%
26,7%
23,3%
0%20%40%60%80%
Branch
Telephone
Online
Mobile
Malaysia banking channel use, 2018
Daily Weekly Monthly
3,1%
7,6%
10,5%
7,8%
4,8%
36,0%
28,7%
14,9%
8,4%
32,8%
19,8%
0% 20% 40% 60% 80%
Branch
Telephone
Online
Mobile
Singapore banking channel use, 2018
Daily Weekly Monthly
Source: GlobalData Banking & Payments surveys
Channel use is trending similarly across ASEAN but Singapore leads the way in omnichannel
Branch channel
Branch is prominent in
• Troubleshooting• Customer service• Advice
But these are high impact occasions that must deliver a superior experience
40,2%
16,5%
27,6%
29,9%
23,2%
37,1%
11,5%
13,0%
14,2%
16,1%
13,7%
39,7%
31,6%
29,3%
34,3%
23,6%
17,3%
16,4%
15,6%
8,9%
8,7%
10,6%
10,3%
10,7%
0% 20% 40% 60% 80% 100%
Depositing a cheque
Querying a transaction
Booking an appointment withan advisor
Having a conversation with anadvisor
Making a complaint
Prefered channel of activity across Asia, 2018
Branch Telephone Online Mobile Other
Source: GlobalData Banking & Payments surveys
Financial product
acquisition Everyday banking is digital but product acquisition remains dominated by the branch
64,2%
72,2%
68,2%
57,0%
51,8%
6,1%
4,0%
10,5%
15,6%
14,4%
17,1%
13,7%
11,1%
16,6%
11,7%
7,0%
5,2%
3,2%
6,4%
8,3%
7,5%
5,3%
6,8%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Current acc
Savings acc
Mortgage
Loan
Credit card
Channel of acqusition across Asia, 2018
Branch/in person Telphone Online Mobile Other
Source: GlobalData Banking & Payments surveys
Bridge the digital gapConsumer preferences have shifted to digital channels
Capturing the growth and switchers requires greater digital investment across the product suite
AsiaQ: “If you had to apply for a financial product today, which one of the following
would be your preferred method?”
22,4% 20,4% 17,9% 20,8%
41,5%38,7%
36,3%38,9%
2,4%1,9%
4,1%6,7%
33,5% 38,7% 41,1%33,4%
0%
20%
40%
60%
80%
100%
120%
Current account Savings account Mortgage Personal loan
Pre
ferr
ed
ch
ann
el o
f ar
ran
gem
en
t, 2
01
8
Mobile Online Telephone Branch
38.8% 40.1% 39.9% 36.6%Digital gap
Source: GlobalData Banking & Payments surveys
Payment trends across Asia
Cash use
Market share of cash payments is decliningEconomic advancement is leading to the increase in cash use but overall cash use is
declining in the mix
660
200 145
234
97 89 50 25
517
256 183 139 117 98
47 20
India Indonesia Thailand Taiwan Philippines Malaysia Singapore Hong Kong
Cash Payment Value of Transaction (USD Billion)
2010 2020
Increasing in overall value due to economic advancement.
Decreasing as a share of payments due to adoption of payment cards and mobile payment.
20% 18% 20%
-18%
15% 13%
1%
-9%
-35%
8% 5%
-27%
5%
-2%-8%
-14%
India Indonesia Thailand Taiwan Philippines Malaysia Singapore Hong Kong
Cash Payment Value of Transaction Growth (%)
2010-15 2015-20
Source: GlobalData Cash Analytics
Card use
Card use is rapidly increasing in Asia Payment card use is expanding across Asia with the rise in adoption of payment cards
by the consumers and the increase of acceptance by merchants
Rapidly gaining popularity across Asia.
19
70 69 41
21 17 21 10
318
145 140
78 61 55 46 30
India Taiwan Hong Kong Singapore Thailand Indonesia Malaysia Philippines
Card Payment Value of Transaction (USD Billion)
2010 2020
Growth slowing but still impressive.
248% 220%116% 85% 99% 44%
63% 53% 47%
380%
239%
55% 52% 46% 43% 32% 31% 31%
Card Payment Value of Transaction Growth (%)
2010-15 2015-20
Source: GlobalData Payment Card Analytics
Mobilepenetration
Mobile wallet becoming popularNot only are more people in Asia embracing mobile wallet they are also using them
much more frequently compared to markets in other regions due to bypassing card and going directly to mobile in some markets while appreciating the new technology and
convenience in other markets
Mobile wallet becoming prevalent in Asia and consumers are embracing it.
China leads the world but all of Asia is trending towards greater mobile payments
9%
17%
16%
22%
16%
18%
14%
22%
18%
16%
16%
8%
13%
24%
28%
30%
35%
37%
41%
46%
60%
65%
Japan
Philippines
Malaysia
Singapore
Indonesia
Thailand
Taiwan
Vietnam
Hong Kong
India
China
Consumer with a mobile wallet and usage, 2018
Have one and USE it Have one but Don’t USE it
Source: GlobalData Banking & Payments surveys
Have one and USE it
16%12% 11%
Mobilepotential
Mobile wallet/payments interestMarkets where mobile wallets have been introduced for a longer period such as China have less consumers to convert while other markets where mobile wallet is just at the cusp of take off such as Thailand and Indonesia are recording greater interests from
consumers
Maturity of the mobile wallet environment determines consumer interest.
More mature markets have more alternatives, particularly cards that limit mobile payment utility.
ASEAN countries are among the most interested in the world.
44%
32%
17%
30%
16%
16%
23%
9%
19%
10%
10%
10%
33%
30%
17%
29%
24%
23%
22%
14%
12%
7%
Japan
Philippines
Malaysia
Singapore
Indonesia
Thailand
Taiwan
Vietnam
Hong Kong
India
China
Consumer without a mobile wallet and their interest, 2018
No m-wallet but interested No m-wallet and NOT interested
Source: GlobalData Banking & Payments surveys
Mobilebarriers
Mobile wallet interestMarkets where mobile wallets have been introduced for a longer period such as China
tend to have less consumers to convert while other markets where mobile wallet is just at the cusp of take off such as Thailand and Indonesia are recording greater interests from
consumers
Security is the main concern for non users of mobile payments baring India and Japan.
Customer education around phone security is a must for mobile payments to accelerate
32%30%
17%
30%
21%
23%
29%
37%
22%20%
27%
22%
25%23% 22%
18%
14%
12%10%
4% 3%
8% 8%
4%
China Hong Kong India Indonesia Japan Malaysia Singapore Taiwan
Reasons why consumers don’t use a mobile wallet, 2018
Worried if phone got lost or stolen Don’t think its better than cash / card
Tried but don't see the benefit
Source: GlobalData Banking & Payments surveys
Fraud trends across Asia
FraudFraud exposure is a major concern and a barrier for further digital payment
adoption..
Consumers education is a continuous effort.
25%
20%
20%
18%
16%
13%
13%
9%
China
Malaysia
India
Indonesia
Hong Kong
Taiwan
Singapore
Japan
Consumers having experienced fraud in the past four years,
2018
7%
14%
11%
6%
11% 11%
22%
9%
5%7%
10%
1%
2% 4%
14%
3%3% 4%
11%
7%
2% 2%3%
1%
6%4%
9% 9%11%
8%9%
3%5%
2%
6%
1% 1%
7%4%
1%
China Hong Kong India Indonesia Japan Malaysia Singapore Taiwan
Types of fraud experienced, 2018
Card details stolen on the internet Card details stolen/skimmed at a merchant
Card/PIN details stolen/skimmed at an ATM Online banking login details stolen
Mobile banking details being stolen
Fraud can be reduced in AsiaA lot of fraud incidents can be prevented at the consumer level and having well
educated consumers in the region will be crucialSource: GlobalData Banking & Payments surveys
Biometrics
Biometrics bring great sense of security
Most consumers in markets around Asia are open to new ways of security measures including biometrics
Most consumers in Asia are open towards biometrics.
Innovative security solutions are more viable in ASEAN than elsewhere.
A higher fraud incidence as helped consumers value biometric anti-fraud measures.
75%
59%
83% 84%
42%
74% 72%67%
China Hong Kong India Indonesia Japan Malaysia Singapore Taiwan
Consumers attitude toward biometrics security measures,
2018
Source: GlobalData Banking & Payments surveys
Happy with biometrics
64%64% 63%
Channel satisfaction and switching
Pure play digital banks
Large sections of the customer base are open to neobanks.
Markets with more establish banking traditions are more resistant.
Incumbents need to be alive to the threat from new entrants.
30,2%
14,1%
7,2%
27,4%
21,8%
9,3%
45,5%
15,2%
8,9%
42,1%
27,3%
36,8%
45,6%
28,7%
9,0%
35,1%
41,8%
33,3%
42,1%
19,8%
23,0%
36,9%
32,4%
32,0%
0,4%
8,2%
18,3%
9,4%
8,6%
16,5%
3,2%
12,6%
18,7%
2,2%
5,0%
6,6%
8,7%
9,9%
5,0%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Indonesia
China
Hong Kong
India
Malaysia
Singapore
Taiwan
Asian average
Openness to digital only banks accross selected Asian markets
Very willing Quite willing Neither willing nor unwilling Quite unwilling Very unwilling
Source: GlobalData Banking & Payments surveys
Channel satisfactionMost banks are meeting customer expectations.
Customer experience is generally good.
Customer channel expectations are not static and are directly influenced by other industries.
29,2%
31,1%
35,3%
36,9%
52,7%
50,4%
52,3%
49,9%
15,1%
14,4%
10,5%
11,0%
2,3%
3,5%
1,6%
1,8%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Branch
Telephone
Online
Mobile
Consumers, Asia (2018)
Very satisfied Fairly satisfied Neither satisfied nor dissatisfied Fairly dissatisfied Very dissatisfied
Source: GlobalData Banking & Payments surveys
SwitchingA poor experience in any bank channel leads to higher churn.
Poor online experience is more of a push factor.
11,3%
14,9%
10,8%
6,3%
6,8%
21,1%
22,4%
29,2%
25,0%
12,3%
32,4%
32,8%
21,5%
42,2%
23,1%
26,8%
22,4%
27,7%
20,3%
35,8%
8,5%
7,5%
10,8%
6,3%
22,1%
0% 20% 40% 60% 80% 100%
Branch
Telephone
Online
Mobile
Market overall
Liklihood of switching banks across Asia, 2018
Very likely Quite likely Neither likely nor unlikely
Not very likely Not at all likely
Dissatisfied with..
Source: GlobalData Banking & Payments surveys
Key trends• Asia is increasingly digital in its banking experience, with mobile soon to be the dominant
channel
• Branch interactions are still valued for advice, problem solving and remains the main channel of product arrangement
• The gap in digital arrangement and preferences needs to be overcome to benefit from the market growth expected
• Card use is eclipsing cash use but will itself be challenged by mobile payments
• Security is a major barrier to alternative payments such as mobile but can be addressed by innovation such as biometrics
• Channel satisfaction matters as a poor experience leads to high customer churn
Thank You!Questions?
Event AppProvide feedback and participate – gain rewards
Sessions: Check into each session
Take Survey
Get Points
CODE: E058