S'pore banks: 40% of new sales lost to rivals
Bain & Company's latest survey on consumer banking behaviours
The latest survey by management consulting firm Bain & Company found that Singapore retail banks lose up to 40 per cent of new product sales to competitors that are better at digital marketing, sales and service.
In its seventh annual report on consumer banking behaviours, the consultancy said such "hidden defection" - purchasing a new banking product from a competing bank or financial technology firm - could get worse.
"There are a lot of customers who frankly consider themselves prisoners in their own banks.
"They don't switch their primary bank because it's too much hassle to do so.
"But they're going to go elsewhere for any new needs," said Ms Chew Seow-Chien, partner and head of Bain's Financial Services practice in South-east Asia.
The survey polled more than 137,000 consumers in 21 countries, including Singapore.
Up to 40 per cent of the time, Singaporean customers polled indicated that they would buy new banking products from a competitor rather than their primary bank.
About 30 per cent of them said they would switch their primary bank if it were easy to do so.
Bain noted that fintechs and technology companies are siphoning off customers seeking high-value products and services, such as credit cards, loans, insurance and investments.
In its research, the consultancy found that deposits made up about 50 per cent of purchases from primary banks here over the last 12 months, compared to just 22 per cent at competing banks.
Meanwhile, insurance was the most purchased product at competing banks - 31 per cent of purchases - followed closely by credit cards.
As younger, more plugged-in generations learn how to bank, their purchases of banking products through digital channels, especially online, will rise.
This makes it important for banks to improve their digital offerings, simplify product lines and streamline user experiences.
"By now, the digital disruption in banking should come as no surprise, and most banks clearly understand the importance of digital migration," said Ms Chew.
"The bigger challenge lies in how to organise the transition and instill the necessary changes, both at the frontline and in the back office, to improve how consumers do their banking."