Customer Value Propositions in Singaporean Retail Banking

Introduction

Retail banking competition in Singapore has arguably reached the point where many consumers see little or no differentiation between products and services across different banks. As such, this report highlights strategies that can be used to improve the customer value proposition in retail banking.

Features and benefits

* Understand consumers' decision making process in Singapore, specifically their views toward different retail banking products.
* Analyze different entry points in the consumer lifecycle, highlighting challenges and strategies to win new customers
* Gain in-depth insight on how banks can improve their customer value proposition, assessing both price and non-price factors

Highlights

Datamonitor investigates the pricing factors and non-price elements in a financial product's value proposition in order to assist banks in addressing their competitiveness in this highly commoditized market.
While there is evidence that the majority of Singaporean consumers are actively looking for alternative products with other banks, Datamonitor found that many consumers have little intention of switching their banking products. Indeed, only 22.4% of consumers indicated they were likely to change their primary bank.
Arguably, price is a simple and quite a powerful tool to change consumers' minds about their products; however, changes to price-related factors may face many challenges. On the other hand, there are other non-price related factors in which FS providers can improve the value propositions: product design, customer experience (service) and brand.

Your key questions answered

* What is the customer value proposition and how this potentially can attract new customers?
* How can banks differentiate through both price and non-price factors in the current retail banking environment in Singapore?
* How significant are interest rates and fees for Singaporean consumers and how do these differ across different banks?
* Why is the customer experience such an important factor and what have other banks done to improve this?
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Executive Summary
Evaluating customer value proposition
Singaporean customers are struggling to differentiate between retail banking products and services
An insignificant difference in savings rates highlights the weak argument for Singaporeans to switch between the major banks
Customer value proposition could be improved in two ways
Improving customer value proposition through price factors
Price is a major factor for Singaporean consumers when selecting banking products
Targeting Singapore property buyers through price: opportunities and threats
Improving customer value proposition through non-price factors
Added functionalities and realized benefits should be the focus for product innovations in Singapore
Banks need to improve their customer experience by providing a consistent approach across all banking channels
The majority of consumers only consider brands which they have heard of
Banks could target niche consumer needs through green products
OVERVIEW
Catalyst
Summary
EVALUATING CUSTOMER VALUE PROPOSITION
Singaporean customers are struggling to differentiate between retail banking products and services
Insight: consumers are actively looking for better products/services
Insight: despite actively researching, consumers have little intention of switching
Insight: many consumers are getting their products from their existing providers
Competitor analysis: Singaporean banks do not offer sufficient benefits to encourage consumers to switch
An insignificant difference in savings rates highlights the weak argument for Singaporeans to switch between the major banks
Banks are focusing on maintaining their existing customers, rather than seeking to acquire new ones
Addressing the customer value proposition
FS providers need to understand the different factors that influence consumers' decision-making processes
There are arguably two elements in a value proposition
IMPROVING CUSTOMER VALUE PROPOSITION THROUGH PRICE FACTORS
Price is a major factor for Singaporean consumers when selecting banking products
Price is important, but it is not the number one factor for current account or savings account customers in Singapore
Price is still the main reason for Singaporean customers to choose a particular lending product
Targeting Singapore property buyers through price: opportunities and threats
Buying a property is one of the important lifestages where consumers review their overall banking
Price factors play an important role in Singaporean customers' short-listing and decision-making processes
Being a mortgage price leader in Singapore may provide a great cross-selling opportunity
Case study: National Australia Bank's price leadership strategy has proven to be popular, but at a cost
IMPROVING CUSTOMER VALUE PROPOSITION THROUGH NON-PRICE FACTORS
Price influences the majority of Singaporeans, but other factors represent opportunities to differentiate
Non-price factors are broadly categorized into three important areas
Improving value through product design and features
Added functionalities and realized benefits should be the focus for product innovations in Singapore
Improving customer experience through multi-channel banking
Customer experience is an essential factor to differentiate in a maturing market
Banks need to improve their customer experience by providing a consistent approach across all banking channels
New banking infrastructures utilize technologies to facilitate a better customer experience
Learning from abroad: personalized services which could make a big difference for Singaporean customers
Building and leveraging brands to attract new customers in SingaporeThe majority of consumers only consider brands which they have heard of
Revisiting what consumers say about the brand is a test of banks' strategic positioning
Singaporean banks could leverage the sizable consumer demand for green banking
APPENDIX
Supplementary data
Methodology
Further reading
References
Ask the analyst
Datamonitor consulting
Disclaimer
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