If you read your news online, chances are you bank online too. Why would a web-savvy person want to queue up at a bank on their lunch break (when seemingly every other punter in town is doing the same thing) if you could handle a transaction over the phone or on the internet? Not surprisingly, the number of consumers embracing digital banking is on the rise.
According to the annual Citi Fin-Q survey of 5,500 people across the region, which is designed to measure the financial quotient or well-being of Asian consumers, almost eight out of every 10 respondents (78%) think digital banking has made managing their personal finances much easier during the past few years. Of course it has. Once you actually complete in less than five minutes a transaction that should take less than five minutes, you’re a convert. Speed, anonymity, and not having to suffer fools are some of the upsides of digital banking.
So, once again, it’s not surprising that 61% express an interest in being able to do more of their day-to-day banking using their mobile phone.
What is also not surprising – but a little worrying -- is that a majority of Asian respondents (52%, up 13% since the question was last asked in 2007), believe they have a good or very good understanding of money management and personal finance matters. I say a little worrying because sometimes too much confidence is a bad thing – like when it leads people to make investment decisions based on a taxi driver's advice, or by following what the latest tycoon seems to be doing.
But maybe the upbeat view on understanding money management is due to the fact that people who responded to this survey are naturally happier people. Presumably, the grumpy sorts slammed the door in the researchers face before the first question was asked.
Consider these upbeat results from the survey conducted at the end of 2010:
- 75% of respondents reported being “very/somewhat satisfied” with their current quality of life (up 8% from 2009)
- An equal number, 75% were “very optimistic/optimistic” about their financial futures (up 6% from 2009)
- 72% said they pay off their full outstanding credit card balance monthly
- 72% reported that they “knew how much they would need in retirement and were on track” or “were not sure but have some savings already” (25% and 47% respectively)
- 65% of respondents expressed confidence that their retirement savings will lead to a comfortable life in retirement (up 10% from 2009)
- 58% of respondents across the region indicated that they “had enough insurance” to protect both them and their families in the event it was needed
- 50% of respondents reported that they set aside some savings from every pay cheque (up 8% from 2009)
- 50% suggested their personal financial situation is “much better off” or “somewhat better off” compared to one year ago (up 11% from 2009)
The research included roughly 500 interviews conducted in 11 countries -- Australia, China, Hong Kong, India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Taiwan and Thailand. It was carried out between November 22 and December 22, 2010. Maybe the holiday spirit had people in a jolly mood. The questionnaire had more than 40 questions, so you would have thought people would have at least started getting grumpy once they realised it took longer to answer the survey question than it does to pay an electric bill online.
Or maybe things are really looking good. What I don’t understand is why Citi is sharing this information with others. There's free publicity and then there's tipping off your competition. Consider, after all, that Citi is undoubtedly using this as at least some evidence as to why it should be investing more heavily into digital services, which it most certainly is doing. A bank spokesman said that digitalisation at Citi helped the bank's retail business grow by more than 50% in 2010. With a full-year net income of $2.1 billion, it was the largest business unit for Citi anywhere globally. Doesn’t Citi realise the competition is going to look at these numbers and this survey and think: Ah, maybe we should be doing this too?
Digital banking is very much the buzz-word at Citi these days. In his most recent email to staff, Citi CEO Vikram Pandit wrote: “We are accelerating our efforts to become the world’s premier digital bank. We are upgrading our technologies and databases across the board to make the consumer experience as user-friendly as possible and our institutional offerings more efficient. We’re in the process of rolling out flagship branches with smart banking technology in major markets. We will link up all our systems so that customers can travel seamlessly from country to country without seeing any decrease in connectivity or service.”
So this effort to up the technology comes right from the top. And it is already very much in play in Asia. The firm’s so-called smart banking platform was first launched in Japan. The key things in smart branches include touch-screen digital screens for customers to browse financial information, view product and service demos and use interactive financial calculators for personal finance budgeting. Plus there are workbenches for customers to conduct their banking transactions online and acquire free stock quotes. Video conferencing facilities are available, enabling clients to get instant access to investment experts based at different locations. And as would be expected, there’s free Wi-Fi connectivity in these banks.
These kind of branches have been rolled out across China, Hong Kong, Korea, Taiwan, Thailand and Vietnam. The bank is currently testing a pilot programme to use chip technology in mobile phones so they can work as credit cards. Given the push, it makes sense to ask the market if that’s what they want. This poll suggests folks do want more high-tech offerings, but the key will be to stay ahead of the curve and differentiate from the competition.
Here's one tip to all who go down this digital path. Make sure the interactive service isn't too cheery. Interactivity is good -- but too many conversations with upbeat Americans is at best just annoying. At worst, it's no different than calling a customer hotline number, only to have to jump through 20 hoops before you can get done what you want to get done.
