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Online Banking Not That 'Hot'

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Posted March 20, 2002 By Staff     Feedback

Singapore banks' customers prefer an ATM or talk to an office in a branch over Internet banking.

In a new study released by Net Value, it stated that 336,000 visitors were found at online banking web sites in Singapore in December 2001, up 72.2 per cent compared to January 2001.

Within the country, Development Bank of Singapore's (DBS) web site was the top site in December 2001, with about 21.3 percent reach among online bank visitors. United Overseas Bank's (UOB) site was next with 6.5 per cent, followed by Citibank with five percent.

Said the director of sales at Net Value, Alan Choo, in The Business Times: "DBS had the largest critical mass and therefore the most visitors ... but with Oversea-Chinese Banking Corporation (OCBC) joining Keppel TatLee, and UOB with Overseas Union Bank (OUB), there could be some development soon in terms of new e-services, such as real-time instant messaging or online chat with customer service officers."

"With a larger customer base after the mergers, it is more cost-efficient for them to develop more new services for their online customers. Online banking will also get more competitive with foreign banks getting QFB (Qualifying Full Bank) licenses. Just look at Citibank, it has just revamped its website," he added.

Despite the growth, Singapore trails Hong Kong and South Korea. Hong Kong had 472,000 visitors to online banking sites in December 2001, up 111 per cent over January 2001 while South Korea had 7.4 million visitors in December last year, up 83.9 per cent over January 2001.

Taiwan, on the other hand, with 1.2 million visitors to its online banking sites, had the least growth as compared to Hong Kong, Singapore and South Korea, with an increase of 38.4 percent of visitors over January last year.

"Active Internet users are those who connect to the Net at least once in a month," said Choo. "We tracked users up to the point where they went into encryption mode - that's when they log in as registered users."

Although Singapore has an active Internet population of 918,000, only about 37 percent of them visited bank websites as of December 2001 mainly because of the widespread availability of ATMs and lack of rewards to entice customers to go online with the banks.

Security is also a barrier to online banking as most people are uncomfortable divulging personal financial information over the Internet. Because of this, the Bank of Singapore has announced that it would phase out its e-banking brand name, finatiQ, and the site will be known as Bank of Singapore.

"People feel more secure knowing it is a bank and regulated by the Monetary Authority of Singapore," said Philip Spencer, COO of finatiQ, as quoted in BT. "New customers think dotcoms are not safe."

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