Banking

FICO Survey Reveals Filipinos’ Rising Preference for Digital Banking Channels

A recent survey by global analytics software firm FICO has revealed that 56 percent of Filipino consumers prefer to use digital channels to engage with their bank during financial hardship.

The poll was conducted in December 2020, during the height of the global COVID-19 pandemic, demonstrates the willingness of consumers to embrace digital banking and the opportunities that exist for banks to further develop their offering.

FICO‘s Advancing New Experiences in Digital Banking survey was done using an online and quantitative poll of 5,000 consumers across ten countries and regions, carried out on behalf of FICO by an independent research company.

The countries and regions surveyed were Australia, Hong Kong, Indonesia, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand and Vietnam.

The high level of smartphone penetration in the Philippines meant that 29 percent of Filipinos preferred to communicate about hardship via their mobile banking app, 12 percent used internet banking, 9 percent communicated via email, 4 percent preferred telebanking, and 2 percent wanted to use virtual conference technology.

Aashish Sharma

“The risk of infection and social distancing requirements made branch visits less appealing last year, accelerating a shift to digital banking channels globally.

Investment in customer management and communication tools that span these channels and product silos, and can deliver personalisation and improved decision making, is key to making digital banking a success.

said Aashish Sharma, risk lifecycle and decision management lead for FICO in Asia Pacific.

Importance of maintaining banking relationships

Banks still have a data and relationship advantage when compared to fintech challengers. The survey revealed that across Asia Pacific, one in three consumers preferred to have all their banking needs serviced by one bank.

In the Philippines this was higher at 40 percent, with a further 34 percent saying that they ‘somewhat agreed’ they would like to deal with just one primary bank.

FICO suggested that “managing multiple bank accounts or finance products with different lenders can often be a complex, time-consuming and costly process for the average banking customer”.

When asked about their willingness to try a fintech or challenger bank, 24 percent of Filipinos said that they were inclined to consider a competitor with a further 43 percent relatively open to the idea.

FICO added that to consolidate and strengthen main bank engagement, lenders need to offer digital banking features that compete with the challengers to ensure the stickiness and viability of long-term customer relationships.

Most appealing reasons to switch banks

When asked about the reasons they would make the switch to a competitor, 38 percent of Filipino consumers said their number one reason would be to secure improved personalization and controls in their digital banking service.

The poll defined this as the ability to view transaction history, update personal details, reset passwords and other such functions. Personalisation and control was also the top reason for switching across Asia Pacific (31%).

Other top switching drivers across Asia Pacific were the ability to control a payment card (set transaction limits, lock or unlock), the ability to set up recurring payments, and improved security features such as biometrics and two-factor authentication.