Banks tap social media to woo mobile banking clients
CONSIDER it a "friend" request.
OCBC's new fund transfer service linked to Facebook comes as banks get chummy with mobile banking customers who pledge greater loyalty.
A Bain & Company survey on retail banking customers last year showed that frequent mobile banking users give much higher loyalty scores to their banks than other customers, including those who go to brick-and-mortar branches for their banking needs.
Singapore was among the 10 countries in the world where mobile banking users showed the biggest difference in loyalty when compared to the traditional customers.
"Digital customers like their banks a lot more," said Mike Baxter, head of the global management consulting company's Americas financial services practice, in an interview.
A branch remains relevant, partly as some customers would still rather "look at the whites of your eyes" when making transactions, said Mr Baxter. But real estate is now expensive - which means a branch network is costlier at a time when regulations are raising costs for banks.
Meanwhile, customers under 35 are the ones who tend to switch banks. And those in their 20s choose their banks based on their use of technology, he said.
"The location of branches has slipped down in factors of importance. The bigger banks that invest in technology are winning the war for switchers."
This comes amid the next wave of digital banking, as lenders strive to be more relevant to customers by aligning banking services with customers' evolving digital lifestyles, Neal Cross, chief innovation officer at DBS, said.
"This sudden acceleration and focus on digital is the realisation that non-traditional competitors are moving into financial services and approaching it with the customer at the centre of what they do," he added.
Lenders in the West are already on the defensive, as non-banks try to make money off peer-to-peer transactions.
But such technological disruption does not necessarily take business away from banks, said Mr Cross.
Many start-ups still rely on card and banking infrastructure to operate, and the smarter banks will partner them to win their customers' favour, and provide a level of security.