Online Banking in Singapore 2010
Datamonitor, May 2010, Pages: 66
Introduction
The Singaporean online banking market is among the most advanced in the world, with a high proportion of the population using the online channel. However, there remains several issues for online banking providers. Singaporeans show a high level of security concern and are hesitant to apply for financial products online.
Scope
-Includes a comprehensive overview of the Singaporean online banking market.
-Provides online banking customer numbers, forecasts and market share of top competitors.
-Discusses security issues and two-factor authentication.
-Based on a global consumer survey covering 9,000 respondents.
Highlights
Consumer trepidation about buying more complex financial products online exists in all countries, not just Singapore, but there is data to suggest that the aversion toward online applications is stronger in Singapore than in comparable countries, especially when it comes to loan products.
Security concerns still constitute a potent barrier for online banking customers, and with new threats as well as solutions for two-factor authentication emerging, providers need to constantly reassess their security solutions and communications with users.
The number of online banking customers is forecasted to increase over the next three years, although growth in the market is gradually slowing down as it becomes more saturated. As an example, customer numbers grew by 49% between 2004 and 2005, but grew by less than 6% between 2009 and 2010.
Reasons to Purchase
-Improve your strategic position using The in-depth analysis of the Singaporean online banking market.
-Understand the unique challenges the online banking market is facing, and benefit from forecasts of future product trends.
-Plan for the future by learning from one of the most innovative financial markets in the world.
Overview
Catalyst
Summary
Executive Summary
Consolidating online adoption and usage
Late adopters, especially the older generations, should be aided through the adoption process
Older customers are more likely to be late adopters
Older online banking customers are more active and advanced than their younger counterparts
There are a number of different strategies for reaching late adopters
Providers need to expand the tasks performed online and improve cross-selling
Consumers should be encouraged to climb the three tiers of online usage
Singaporeans hesitate to take the step from researching to applying for products
The emergence of price comparison sites in Singapore may spur online applications
Selling financial products over the internet in Singapore will become more important
Security and online banking
Security concerns and lacking interactivity are the biggest hurdles for non-adopters of online banking
Concerns over security is the most common reason for Singaporeans not using online banking
A maturing online banking market will see abating levels of security concerns
Two-factor authentication has been a success in Singapore but is facing rising threats
Hardware tokens are falling out of favor as compared to other two-factor authentication solutions
SMS OTP 2FA solutions are slightly less vulnerable to man-in-the-middle type attacks
3FA is being considered by Australian banks
PassWindow is a new alternative form of 2FA solution with promise
Novel ways of easing consumer security concerns have been introduced in Singapore
Both real and perceived security must be improved
DBS has introduced an online banking guarantee
Customer numbers, market shares and forecasts
The number of online banking customers in Singapore will grow to almost four million by 2013
There has recently been a renewed interest in the mobile channel
DBS has a dominant market share of Singaporean online banking customers
Table of figures
Table of tables
Consolidating Online Adoption and Usage
Late adopters should be aided through the adoption process
Only late adopters remain to be converted to online banking in Singapore
Older customers are more likely to be late adopters
Lack of interactivity rather than security concerns discourage older consumers from online banking
Lack of computer access and literacy are potent hurdles for older Singaporeans
Older online banking customers are more active and advanced than their younger counterparts
There are a number of different strategies for reaching late adopters
Late adopter characteristics have implications for targeting strategies
Adoption curves may shift as innovations come and mature quicker
Providers need to expand the tasks performed online and improve cross-selling
Consumers should be encouraged to climb the three tiers of online usage
The level of commitment of a product is inversely related to its suitability for the online channel
Complexity makes online distribution less attractive
Higher commodity level facilitates the online channel
Singaporeans hesitate to take the step from researching to applying for products
Interaction and safety concerns are common reasons in Singapore for not borrowing online
The emergence of price comparison sites in Singapore may spur online applications
Selling financial products over the internet in Singapore will become more important
Security and Online Banking
Singaporeans' high levels of security concern impact on online adoption and usage
Singaporeans have significant security concerns
Concern over security is the most common reason for Singaporeans not using online banking
A maturing online banking market will see abating levels of security concerns
Two-factor authentication has been a success in Singapore but is facing rising threats
Online security may be increased with two-factor authentication
Two-factor authentication was mandated in 2005 by MAS and was welcomed by Singaporean consumers
Banks in Singapore have employed different strategies for 2FA
Properly designed SMS OTP 2FA solutions can offer better protection against fraud
Hardware tokens are falling out of favor as compared to other 2FA solutions
SMS OTP 2FA solutions are slightly less vulnerable to man-in-the-middle type attacks
SMS OTPs eliminate the need for a separate device and are preferred by consumers given a choice
Mobile phone software eliminates the need for network access
Australian bank NAB is considering introducing voice-based 3FA for online banking
PassWindow is a new alternative form of 2FA solution with promise
Novel ways of easing consumer security concerns have been introduced in Singapore
Both real and perceived security must be improved
DBS has introduced an online banking guarantee
There are a number of restrictions to the DBS guarantee
The DBS guarantee is an astute initiative that increases both real and perceived security
Customer Numbers, Market Shares and Forecasts
The number of online banking customers in Singapore will grow to almost four million by 2013
Growth in online customer numbers is slowing as the market becomes more saturated
Mobile banking customer numbers are set to increase
There has recently been a renewed interest in the mobile channel
More advanced mobile phone technology drives growth in mobile banking
DBS has a dominant market share of Singaporean online banking customers
There are six major online banking sites in Singapore
Many customers of Singaporean online banking connect from other countries
DBS has a dominant share of online banking customers
APPENDIX
Data tables
Methodology
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer
List of Tables
Table 1: Later adopters vary from earlier adopters in many ways
Table 2: Singaporean banks use different 2FA options
Table 3: Advantages and disadvantages of different 2FA solutions
Table 4: Singaporean online banking customer numbers and forecasts
Table 5: Singaporean online banking sites and traffic rankings, April 2010
Table 6: Top recent non-Singaporean locations for visitors of Singaporean online banking sites, April 2010
Table 7: Number of customers regarding bank as main online banking institution
Table 8: Broadband household penetration in Singapore
Table 9: Proportion who have bought financial services online, by country and age group
Table 10: Reasons for not banking online, by age group
Table 11: Computer access and online banking in Singapore
Table 12: Proportion of online banking users that check their balance daily by age group
Table 13: Tasks performed online by online banking customers by age group
Table 14: Online purchases in Singapore by product
Table 15: Online research and applications for loans by country
Table 16: Proportion that agrees or strongly agrees with attitude statements by country
Table 17: Proportion that agrees or strongly agrees with attitude statements by country
Table 18: Proportion that agrees or strongly agrees with attitude statements by country
Table 19: Financial product comparison site awareness and usage by country
Table 20: Financial product comparison site purchases by country
Table 21: Financial product comparison site trust by country
Table 22: Online purchases by customer group
Table 23: Proportion that agrees or strongly agrees with attitude statements by country
Table 24: Reasons for Singaporeans not using online banking
Table 25: Reasons for not using online banking by country
Table 26: Singaporean online banking customers
Table 27: Online banking customer numbers and market shares by bank in Singapore in 2010
List of Figures
Figure 1: Singaporean online banking customer numbers are forecasted to reach almost four million by 2013
Figure 2: Rapid broadband penetration has provided a boon for online banking adoption
Figure 3: Singaporean online banking providers now have to reach late adopters
Figure 4: Older Singaporeans are less likely to have bought financial services online
Figure 5: Lack of interactivity disproportionately discourages older customers from online banking
Figure 6: Lack of computer access and literacy are hurdles for adoption of online banking by older Singaporeans
Figure 7: Older online banking customers are more likely to check their balance daily
Figure 8: Older online banking customers are more likely to have performed a range of tasks
Figure 9: Innovations come more frequently and reach saturation quicker
Figure 10: There are three tiers of online usage
Figure 11: More than half of Singaporean credit cardholders have bought a card online
Figure 12: Commitment, complexity and commodity govern online adoption rates of a financial product
Figure 13: Singaporeans research loans online but are less likely to apply online
Figure 14: Singaporean consumers are averse to applying for loans online
Figure 15: Lack of face-to-face interaction deters Singaporeans from online borrowing
Figure 16: Security concerns are higher in Singapore regarding online loan applications
Figure 17: Financial product price comparison site usage and awareness is relatively low in Singapore
Figure 18: Singaporeans have a relatively low level of trust in online price comparison sites
Figure 19: Few Singaporeans have purchased financial products through price comparison sites
Figure 20: Consumers who have bought credit cards online are much more likely to have bought other financial products online
Figure 21: Singaporeans are especially likely to have concerns over the security of online banking
Figure 22: Security concern is the most common reason for Singaporeans not using online banking
Figure 23: Countries differ in the importance of interactivity and security concerns
Figure 24: SMS OTP 2FA solutions can offer extra protection against man-in-the-middle attacks
Figure 25: PassWindow uses pattern recognition to generate OTPs
Figure 26: Both real and perceived security must be developed
Figure 27: Singaporean online banking customer numbers are forecasted to reach almost four million by 2013
Figure 28: DBS has a dominant market share of online banking customers in Singapore, 2010
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