The digitalisation saga of Singapore banks: what's next after the boom?

As the country’s economy goes up, the banking sector braces for further digital break through.

Whilst many banks in the city feel that they are able to ride the fintech tide, many of them have yet to actually catch up to the latest digital trends. The Monetary Authority of Singapore (MAS) estimates that financial institutions that are slow to adopt new technologies could experience income slashes of up to 5%, as fintech payment channels increase to 10% in the next two years and then 50% in five years.

Nevertheless, analysts forecast a positive year ahead for the banking sector, on the back of manufacturing and services growth, as well as a sustained momentum from the previous year. Given their large customer bases, financial expertise, and accumulated resources, banks should be able to take advantage of these economic prospects to further drive innovation and encourage creativity within their companies.

Tek Yew Chia, head, financial advisory services practice, KPMG Singapore, said that chief information officers (CIOs) need to be in an ‘act fast mode’ and create an environment to test new services and digital technology outside of the core banking system. According to Chia, this provides the freedom to iterate quickly and prove the effectiveness of a new service or system, before bringing that service into the main banking business.

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Over the course of the coming year, more banks will experiment with artificial intelligence (AI), particularly robotics, in preparation for application in mainstream channels.