Digital banking preference accelerates in APAC

by NURUL SUHAIDI / pic source

THE consumer behaviour on digital banking has accelerated in the Asia Pacific (APAC) with 90% opting for digital banking alternatives across the region, according to APAC Personal Financial Services Survey 2021. 

In 2021, 90% of Malaysian consumers use digital banking at least once per month compared to 62% during 2017, and 62% are using fintech or e-wallet services compared to 15% in 2017. 

“The survey found out that active digital banking users have over 90% in developed Asia and 88% in emerging Asia,” the survey stated. 

It added that the increased acceptance of digital banking since Covid-19 has pushed the industry to a new degree of maturity, opening up new potential and challenges for both banks and non-banks. 

Whereas in emerging APAC, fintech apps and e-wallet penetration reached 54% in 2021, compared with 43% in developed APAC in the same year. 

Most respondents expressed an openness to multi-channel services since majority of consumers are digitally capable. With 31% opt for “digital-first” and 66% still consider mixed-mode “multi-channel”, however, mentioned that they are likely to relying less on bank branches. 

Overall, it said the digital behaviour from “digital-first” and “multi-channel” is relatively higher for the younger age group (21-39) — 35% vs 31% 

This discrepancy between interest and actual behaviour is likely the result of many banks having a limited digital offering and not engaging effectively with digital users to deepen relationships. 

Although bank branches once served as the primary platform for interacting with customers, today approximately 97% of consumers across APAC either consider the digital channel the best of several ways to interact with their bank (digital-first) or use it as one of several channels.

The survey results also suggested that the high levels of digital adoption are likely to hold as the pandemic subsides.

For post-Covid-19, roughly 80% of consumers said they expect to maintain or increase their use of mobile and online channels, while 42% of respondents indicate that they expect to visit their branch either less often or not at all. 

This brings opportunity for digital-first banks which survey found over 60% of consumers open to migrating. Meanwhile, 13% from Malaysia agree to consider switching to direct bank, 17% in emerging APAC whereas 12% from the developed Asia Pacific. 

According to the survey, the change to digital banking occurred swiftly, most likely expedited by existing trends such as increased use of digital channels for different transactions, including banking, and increased usage of teleconferencing or video conferences in place of face-to-face meetings. 

The survey covered approximately 20,000 urban banked respondents in 15 APAC markets.