Singaporeans more satisfied with e-wallets than banks in 2020

Customer satisfaction for e-wallets was higher than that of banks.

Whilst Singaporeans’ e-payments use soared in 2020, local banks recorded lower levels of customer satisfaction, loyalty and price tolerance compared to the previous year, according to a study by the Singapore Management University (SMU) Institute of Service Excellence (ISU).

According to the latest findings of the Customer Satisfaction Index of Singapore (CSISG) 2020 national study,  the banking sub-sector scored 74 points (in a scale of 0 to 100) in customer satisfaction for 2020, a 1.7% decline compared to 2019.

The e-payments subsector—a new inclusion in the study—beat out banks by 5 points, totalling 79 points; whilst the credit cards subsector remained at 72.7 points in 2020.

Temporary branch closures resulting from the circuit breaker measures contributed to the fall amongst banks and the rise of e-payments and e-commerce spending, noted Neeta Lachmandas, SMU’s Institute of Service Excellence (ISE) Executive Director.

“Customers have become more price sensitive given the current economic environment. Coupled with reduced service levels, such as temporary branch closures due to the Covid-19 pandemic, the industry as a whole had a tough time in 2020,” explained Lachmandas.

Despite this, SMU noted that adoption of banks’ digital channels marginally rose from 72.1% in 2019 to 76.9% in 2020. In particular, customers aged 60 and above using digital banking platforms skyrocketed from 20.3% in 2019 to 65.5% in 2020.

“Banks adapted to the closure of branches by ramping up their digital channels, prompting older customers who tended to not use these channels to adopt them in a big way in the past year,” said Chen Yongchan, ISE Head of Research and Consulting. “Interestingly, these customers were observed to be relatively satisfied with the use of internet banking.”

The average internet banking satisfaction rating for all bank customers was 7.40 points (on a 1 to 10 scale), whilst the average rating for customers aged 60 and above was 7.74 points.

Overall, Singaporeans’ adoption of digital financial services notedly increased in 2020, with 55.6% of e-payment users utilizing the platform at least once a week, the study found.

“With four in five e-payment respondents reporting an increase in the use of e-payments as compared to 2019, the industry’s efforts to rollout e-payment solutions to merchants and customers appear to have gained momentum and bore fruit in 2020,” Chen added.

More credit card customers were also observed to be taking their spending online, mostly to have food delivered. The percentage of cardholders spending on food delivery platforms increased to 16.1% in 2020 compared to just 3.8% in 2019.

Online shopping marketplaces also saw a marked increase in the proportion of their spending, with 10.8% of respondents indicating it as their most recent spend category compared to 6.6% the year before.