Overview 1
Catalyst 1
Summary 1
Executive Summary 2
Conservatism drives product selection 2
Insight: Singaporean consumers are conservative in managing their finances 2
Insight: Trust is unchanged but there is more that banks can do to win customers 2
Action: Transparency will build trust among consumers 2
Cross-selling still offers plenty of growth opportunities 3
Insight: Singaporean consumers have a diverse product holding across different financial institutions, showing opportunities to consolidate 3
Insight: Exclusive offers drive diverse credit card product holdings 3
Action: Product bundling incentives will drive customer acquisition/consolidation 4
The future focus of Singaporean financial services will be ethical banking 4
Insight: Consumers tend to go to institutions with an ethical corporate view 4
Action: Point of differentiation for the future 5
Table of Contents 6
Table of figures 6
Table of tables 7
Introduction 8
Characteristics of Singaporean consumers 8
Technology influences consumer finance in Singapore 8
Understanding changes in consumer attitudes towards financial services 8
Characteristics of Singaporean retail banking 9
Most Singaporean banks are unaffected by volatility in wholesale markets due to their large retail deposit base 9
Three major banks dominate this highly concentrated market 11
Trend: Conservatism Drives Product Selection 12
Insight: Singaporean consumers are conservative in managing their finances 12
Singaporeans are marginally more conservative than consumers in other countries 13
In Singapore, all age groups see financial stability as the number one factor in making a financial decision 13
Consumers with a higher level of financial awareness are more demanding about both financial stability and product pricing 14
Consumers are more concerned about the future value of their assets than their ability to service their liabilities 16
Insight: Trust is unchanged but there is more that banks can do to win customers 17
Action: Transparency will build trust among consumers 19
Financial providers need to focus on simple and transparent products/services 21
Consumers seek more information and better communication from financial providers 21
Singaporean consumers will continue to avoid uncertainty 22
Case study: ANZ emphasizes simplified and transparent banking 22
Banks need to provide their consumers with independent and quality advice 24
Trend: Cross-Selling Still Offers Plenty of Growth Opportunities 25
Insight: Singaporean consumers have a diverse product holding across different financial institutions, showing opportunities to consolidate 25
Singaporean customers have an average of 1.6 other products with their MFI 26
Traditionally, current account customers are the starting point for cross-selling, but this is not necessarily the case for many foreign banks, which have limited retail networks 27
Insight: Exclusive offers drive diverse credit card product holdings 28
Incentives drive customer acquisition and spending habits 29
Sustainability of exclusive discount offers in Singapore 30
New revenue opportunity 30
Creating a basis for future growth 30
Case study: DBS Live Fresh Platinum credit card 31
Action: Product bundling incentives will drive customer acquisition/consolidation 32
Creating incentives through product bundling 32
Creating convenience through bundling 32
Trends in package banking include the three pillars of retail banking: home loans, current accounts, and credit cards 32
Case study: Westpac offers Premier Advantage Package 33
Trend: The Future Focus of Singaporean Financial Services Will be Ethical Banking 34
Insight: Consumers tend to go to institutions with an ethical corporate view 34
Older consumer groups show stronger ethical views 34
Action: Point of differentiation for the future 35
The majority of banks in Singapore see ethical banking as an important factor 35
Profits and ethics are not mutually exclusive 35
Appendix 38
Supplementary data 38
Definitions 47
Exclusive discount offer 47
EZ-Link 47
Main financial institution (MFI) 47
Network for Electronic Transfers (NETS) 47
Methodology 47
Further reading 47
Ask the analyst 47
Datamonitor consulting 48
Disclaimer 48
List of Tables
Table 1: Market size and growth of lending and deposits in Singapore, 2001-10 38
Table 2: Market share: loans and advances, December 2009 41
Table 3: Steps before making financial decisions 41
Table 4: Comparison to other Asia Pacific countries: steps before making financial decision 42
Table 5: Financial stability versus product's pricing, variance by age group 42
Table 6: Financial stability versus product's pricing, variance by level of financial awareness 43
Table 7: Levels of concern over different product areas 43
Table 8: Level of trust towards banks 44
Table 9: Steps before making a financial decision: I seek professional advice before I make a financial decision 44
Table 10: Average number of financial products per person by country 44
Table 11: Number of products held with MFI (excluding main current account) 45
Table 12: Composition of products held with MFI 45
Table 13: Number of credit cards per person across different countries 45
Table 14: Credit card transactions in Singapore by category 46
Table 15: Steps before making financial decisions: I look for a product/provider with green or ethical credentials 46
Table 16: Steps before making financial decisions: I look for a product/provider with green or ethical credentials, agreement by age group 46
List of Figures
Figure 1: A large portion of Singaporeans hold more than three credit cards 4
Figure 2: There has been strong growth in both the deposit and lending sectors in Singapore, 2001-10 10
Figure 3: Three major banks dominate loans and advances in Singapore, 2009 11
Figure 4: For Singaporeans, financial stability is the number one factor when making a financial decision 12
Figure 5: Singaporeans are marginally more conservative than consumers in other countries 13
Figure 6: All age groups see financial stability as the number one factor in making a financial decision 14
Figure 7: Consumers with a higher level of financial awareness are more demanding 15
Figure 8: Singapore consumers are more concerned about the future of their assets than their ability to service their liabilities 16
Figure 9: Singaporeans show a high level of trust toward their banks 18
Figure 10: The Datamonitor Trust Model 19
Figure 11: CBA is addressing 'reliability' through its determination to deliver on its promises 21
Figure 12: Singaporean customers are paying more attention to banking literature now than they were before the downturn 22
Figure 13: Transparent banking is key to building relationships and trust 23
Figure 14: Singaporeans are likely to seek professional advice before making a financial decision 24
Figure 15: Singapore has a high average product holding per customer 25
Figure 16: Singaporeans hold a moderate level of products (excluding their main current account) within their MFI 26
Figure 17: Other product holdings with MFI 27
Figure 18: A large portion of Singaporeans hold more than three credit cards 28
Figure 19: Spend on food and drink dominates credit card transactions in Singapore 29
Figure 20: Rewards from DBS Live Fresh Platinum credit card 31
Figure 21: Incentives in home loan packages in Australia 33
Figure 22: Singaporeans look for a product/provider with green or ethical credentials 34
Figure 23: Older consumer groups show stronger ethical views 35
Figure 24: The campaign on the removal of toxic fuels by the Co-operative Bank 36
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