RETAIL banking through mobile devices has swiftly overtaken Internet banking as the main form of digital interaction for consumers in Singapore, a recent Bain & Company study suggested.
But whether banks are making money through this channel is less clear. Lenders here are not locking in mobile-banking users who are shopping for specific products.
Numbers from the consultancy also emphasise the competitive nature of Singapore's retail banking space - given that retail consumers here are significantly savvier than their global peers, and are not limiting purchases to their primary bank.
About 30 per cent of total interactions between consumers and banks were done on mobile devices last year, compared to 25 per cent of interactions that were made on computers, a global study by the Bain & Company showed.
This contrasts with the situation in 2013, when about 15 per cent of total interactions were mobile ones, and over 30 per cent of interactions were done on the computer. It is similar to situations in many markets, such as China, the UK, the US, and Australia, where mobile accounts for around one-third of all interactions worldwide.
Meanwhile, branch visits for routine transactions are declining in Singapore, from nearly 60 per cent in 2013, to 49 per cent last year.
"However, mobile remains an untapped tool for influencing bank product purchases, opening the door for approximately half of bank customers to buy a new product from a competitor," Bain & Company said, citing a survey on 1,000 respondents based in Singapore.
"Despite mobile's dominance, most banks are not yet using it as effectively as a sales tool, particularly for high-margin products, including mortgages and credit cards."
Notably, only 19 per cent of users last year consulted a mobile app when researching and buying new banking products. Nearly half go to their primary bank's website, while the rest speak with bank staff.
And more than half of customers in Singapore ended up buying a new product from a competing bank in the last year. This is significantly higher than the global average of 28 per cent for developed markets.
"Yet, this defection often goes unnoticed because banks are usually not aware their customers were shopping in the first place and seldom know they lost the sale," Bain & Company said.
"As more digital startups and specialist firms, which are less encumbered by legacy systems and regulations, enter the market and siphon off business, banks stand to lose even more customers and profits."
Speaking at the sidelines of a press briefing, Louis Foo, head of the consumer banking group's eBusiness division at DBS, told BT that it has taken half the time - or four years - for the bank to hit one million mobile banking customers, compared to that for Internet banking users. The bank expects to add more than 200,000 new mobile-banking users this year.
DBS's mobile app QuickCredit - through which customers can apply for unsecured credit - has led to a good take-up of loans, said Mr Foo, though most loan applications are still driven by branches.
He added that it can be difficult to offer a wider range of products and services on mobile apps, due to practical issues such as screen sizes. DBS customers who want to transfer funds to customers of other banks still need to log into their Internet banking account, and use the authentication token for security purposes.
Currently, DBS offers about 30 services through mobile banking, and it will soon add remittance services by the end of this year.