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    Virtual Banking-SG Overview PDF

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    Inez
    The document discusses the rise of virtual banking and challenges it poses to traditional banks, noting that virtual banks have an edge in offering faster, more convenient services digitally but also face concerns around risks from reduced identity validation and data privacy. It is expected to shift some customers, especially millennials and SMEs, to digital banks while also putting pressure on smaller retail banks to innovate and potentially forming partnerships with incumbents.

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    Virtual Banking-SG Overview PDF

    Uploaded by

    Inez
    71 views1 page
    The document discusses the rise of virtual banking and challenges it poses to traditional banks, noting that virtual banks have an edge in offering faster, more convenient services digitally but also face concerns around risks from reduced identity validation and data privacy. It is expected to shift some customers, especially millennials and SMEs, to digital banks while also putting pressure on smaller retail banks to innovate and potentially forming partnerships with incumbents.

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    The document discusses the rise of virtual banking and challenges it poses to traditional banks, noting that virtual banks have an edge in offering faster, more convenient services digitally but also face concerns around risks from reduced identity validation and data privacy. It is expected to shift some customers, especially millennials and SMEs, to digital banks while also putting pressure on smaller retail banks to innovate and potentially forming partnerships with incumbents.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    71 views1 page

    Virtual Banking-SG Overview PDF

    Uploaded by

    Inez
    The document discusses the rise of virtual banking and challenges it poses to traditional banks, noting that virtual banks have an edge in offering faster, more convenient services digitally but also face concerns around risks from reduced identity validation and data privacy. It is expected to shift some customers, especially millennials and SMEs, to digital banks while also putting pressure on smaller retail banks to innovate and potentially forming partnerships with incumbents.

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    of 1

    A bank which provides all its facilities… 2013-2017 Dec’14 Jul’17 May’19 Apply by Aug’19

    Rise of ”challenger” Launch of China’s 2 million+ accounts 8 virtual banking for 2 full and 3
    banks paving the first virtual bank within 2 weeks of licenses granted wholesale licenses.
    way for virtual backed by Tencent launch, backed by (30+ applicants), Interested: Singtel,
    banking ecosystem Tencent & Alibaba JVs & foreign- Grab, Razer,
    backing trends Validus, InstaRem.

    Through mobile/
    Online tablet apps

    Edge in... Concerns in…


    • Offering financial services to the underbanked & • Tendency of having high loan-to-asset ratio given the
    underserved segments e.g. foreign workers ease of loan application and limited capital
    Typically no
    • Faster transfers and loans, especially for SMEs • Lack of face-to-face identity validation increasing risk
    physical
    • Offering new products, quickly adapting to clients’ of identity theft, smurfing, and other financial crimes
    branches
    needs due to agility provided by fully online setup • Data privacy and liabilities – a digital bank is able to
    • Well-designed applications and excellent user collect a lot more data; how it is used and required
    experience, including 24/7 availability infrastructures to safeguard it need to be in place
    “Competition and innovation has to be aimed
    at serving the needs of society and the economy better.”
    Senior Minister & Chairman, Monetary Authority of Singapore, Tharman Expected impacts Possible response by incumbents
    Shanmugaratnam – June 2019
    • Shift of SMEs, transfers and remittances, as well as a • Partnership – incumbents can render credibility and
    * portion of millennial clients to the digital bank KYC resources while benefitting from data & future
    7 out of 10 Singaporeans • Pressure to be felt more by smaller retail banks rather conversion once clients’ banking needs diversified
    are open to new digital platforms* than the 3 major incumbents as they are generally • Establish a separate ring-fenced setup to complement
    well-positioned digitally existing offerings and capture new market or perform
    • Overall increase in expectations for rapid onboarding, additional client segmentation
    and personalized service – fueling innovation for • Review and identify ways to migrate away from legacy
    *higher than global average (Oracle 2018 The New Digital Demand report) improved profitability and user experience infrastructures and transition clients to be more nimble

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