Fri 11 Jun 2010
Online Banking in Singapore
Posted by bharatbookgroup under Online , Banking , report , Market Report , Singapore , investment , InternetNo Comments
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 Datamonitor’’s 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.
Table of Contents:
Overview 1
Catalyst 1
Summary 1
Executive Summary 2
Consolidating online adoption and usage 2
Late adopters, especially the older generations, should be aided through the adoption process 2
Older customers are more likely to be late adopters 2
Older online banking customers are more active and advanced than their younger counterparts 2
There are a number of different strategies for reaching late adopters 2
Providers need to expand the tasks performed online and improve cross-selling 3
Consumers should be encouraged to climb the three tiers of online usage 3
Singaporeans hesitate to take the step from researching to applying for products 3
The emergence of price comparison sites in Singapore may spur online applications 3
Selling financial products over the internet in Singapore will become more important 4
Security and online banking 4
Security concerns and lacking interactivity are the biggest hurdles for non-adopters of online banking 4
Concerns over security is the most common reason for Singaporeans not using online banking 4
A maturing online banking market will see abating levels of security concerns 5
Two-factor authentication has been a success in Singapore but is facing rising threats 5
Hardware tokens are falling out of favor as compared to other two-factor authentication solutions 5
SMS OTP 2FA solutions are slightly less vulnerable to man-in-the-middle type attacks 5
3FA is being considered by Australian banks 6
PassWindow is a new alternative form of 2FA solution with promise 6
Novel ways of easing consumer security concerns have been introduced in Singapore 6
Both real and perceived security must be improved 6
DBS has introduced an online banking guarantee 6
Customer numbers, market shares and forecasts 7
The number of online banking customers in Singapore will grow to almost four million by 2013 7
There has recently been a renewed interest in the mobile channel 8
DBS has a dominant market share of Singaporean online banking customers 8
Table of Contents 9
Table of figures 10
Table of tables 11
Consolidating Online Adoption and Usage 12
Late adopters should be aided through the adoption process 12
Only late adopters remain to be converted to online banking in Singapore 12
Older customers are more likely to be late adopters 14
Lack of interactivity rather than security concerns discourage older consumers from online banking 15
Lack of computer access and literacy are potent hurdles for older Singaporeans 16
Older online banking customers are more active and advanced than their younger counterparts 18
There are a number of different strategies for reaching late adopters 19
Late adopter characteristics have implications for targeting strategies 20
Adoption curves may shift as innovations come and mature quicker 21
Providers need to expand the tasks performed online and improve cross-selling 23
Consumers should be encouraged to climb the three tiers of online usage 23
The level of commitment of a product is inversely related to its suitability for the online channel 26
Complexity makes online distribution less attractive 26
Higher commodity level facilitates the online channel 27
Singaporeans hesitate to take the step from researching to applying for products 27
Interaction and safety concerns are common reasons in Singapore for not borrowing online 29
The emergence of price comparison sites in Singapore may spur online applications 31
Selling financial products over the internet in Singapore will become more important 34
Security and Online Banking 37
Singaporeans” high levels of security concern impact on online adoption and usage 37
Singaporeans have significant security concerns 37
Concern over security is the most common reason for Singaporeans not using online banking 38
A maturing online banking market will see abating levels of security concerns 39
Two-factor authentication has been a success in Singapore but is facing rising threats 40
Online security may be increased with two-factor authentication 40
Two-factor authentication was mandated in 2005 by MAS and was welcomed by Singaporean consumers 41
Banks in Singapore have employed different strategies for 2FA 41
Properly designed SMS OTP 2FA solutions can offer better protection against fraud 43
Hardware tokens are falling out of favor as compared to other 2FA solutions 43
SMS OTP 2FA solutions are slightly less vulnerable to man-in-the-middle type attacks 43
SMS OTPs eliminate the need for a separate device and are preferred by consumers given a choice 45
Mobile phone software eliminates the need for network access 45
Australian bank NAB is considering introducing voice-based 3FA for online banking 46
PassWindow is a new alternative form of 2FA solution with promise 46
Novel ways of easing consumer security concerns have been introduced in Singapore 48
Both real and perceived security must be improved 48
DBS has introduced an online banking guarantee 49
There are a number of restrictions to the DBS guarantee 49
The DBS guarantee is an astute initiative that increases both real and perceived security 50
Customer Numbers, Market Shares and Forecasts 51
The number of online banking customers in Singapore will grow to almost four million by 2013 51
Growth in online customer numbers is slowing as the market becomes more saturated 51
Mobile banking customer numbers are set to increase 52
There has recently been a renewed interest in the mobile channel 52
More advanced mobile phone technology drives growth in mobile banking 53
DBS has a dominant market share of Singaporean online banking customers 53
There are six major online banking sites in Singapore 53
Many customers of Singaporean online banking connect from other countries 54
DBS has a dominant share of online banking customers 55
APPENDIX 58
Data tables 58
Methodology 65
Further reading 65
Ask the analyst 65
Datamonitor consulting 66
Disclaimer 66
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