Why did it take long for Singapore to roll out video banking?

Here are the challenges banks have to face.

Video banking is no longer news in other developed countries, but in Singapore, the interest in merging video and banking is just starting to pick up as Standard Chartered Bank introduced the service last July 26. While in some countries, customers can now simply connect to the bank through an App on Android and Apple device, the service rolled out in Singapore only allows clients to speak with agents over a secure video connection from a location of their choice via their laptop. Singapore may seem slower in adopting this latest banking technology, but analysts say it is definitely the way to go in the coming years, but with obstacles.

“This is undoubtedly the digital age and we are now even seeing banks venture into “hip new spaces” like Instagram so I think video banking service is long overdue,” said June Ho, director of law firm Wikborg Rein.

According to Ho, consumer preferences have now certainly evolved with majority now very familiar and comfortable with online banking, as well as communicating via accessible and affordable video chat providers such as Skype and Facetime. Marrying the two, she said, is a natural progression and one now wonders why it took so long to implement in Singapore.

Ho explained that customer preparedness and acceptance of this new service will be initial challenges but she believes that these are easy to overcome given that most Singaporeans are digitally-savvy and well-connected.

Dominic Gamble, CEO and founder of wealth management firm, WEALTH, also believes that while there may be a perception problem with consumers in Singapore still not used to conducting their banking affairs online via video, this will not be a significant challenge.

“Our experience with WEALTH shows that even those in the more traditional wealth management sector have enthusiastically embraced online and mobile as a means of managing their finances, but as a first mover, Standard Chartered will have to persuade consumers that this is an easier, safer and more efficient means of banking,” he said.
According to Ho, the initial investment required to secure high quality connectivity from any location and on any device will also be a challenge but this should not be a big hindrance. She added that there will also be the usual threats and challenges about cyber security/privacy facing online banking as a whole and banks still need to ensure it has robust and secure cyber security measures in place.

Will other banks follow suit?

There might be hesitations among Singapore banks in recent years to adopt the latest technology, but with Standard Chartered Bank already taking the initial step, it’s probably only a matter of time before we see other banks following suit, said experts.

“Banking is a highly competitive space. Banks need to follow closely what their competitors are offering the customers and stay relevant, or get left behind,” said Ho.

According to Ho, video banking in particular is likely to benefit the international banks more as these banks tend to have a thinner distribution/outreach network than the local banks. This will be a very attractive platform for them to be more accessible to their existing customers as well as provide greater leverage to draw in new customers.

Meanwhile, WEALTH’s Gamble noted that while mobile and online banking resulted in speedier banking services, it has also come at the cost of personalised service. Video banking, he said, is a way of offering more choice and more convenience to customers. He added that banks are starting to question the need and costs for so many brick-and-mortar branches.

“Video banking is a way of bridging this, by providing a personalised, face-to-face service at the convenience of the consumer and hopefully at a lower cost,” he explained.
Citing a recent report from banking association Efma and video collaboration technology maker Vidyo, Ho noted that 10% of banks will use video for banking services in 2016, 50% will use it by the end of 2017 and 80% by the end of 2018.

According to Ho, Singapore is definitely a hotbed for this service as most Singaporeans are already mobile-connected and digitally savvy. Singapore, she added, is also one of the few countries which is densely wired up with high speed internet and so is definitely compatible with this new banking platform.
Ho added that as technology is not constrained by space and time, it’s not unthinkable that in the near future, personal banking such as private banking, wealth management, mortgage/loan services can be done 24-7 from anywhere in the world without the need to even step outside your home/office.

Gamble meanwhile sees opportunities in more specialised banking services, such as wealth management.

“Widely perceived as ‘traditional’ and averse to technology, we are already seeing more investors go online to source their wealth management experts and services, rather than rely on word-of-mouth and referrals, which is proven to be an imperfect method of matching a wealth manager with their client,” he said.
Gamble believes that Singapore’s wealth management industry will see a natural progression onto video, whereby wealth managers will be able to provide updates on their clients’ investments, advice and analysis in real time and face-to-face – through video. This means more convenience for investors – many of whom travel heavily and would appreciate the flexibility – and the ability to provide a high level of personalised service for the wealth manager.