Millennial, Mobile, Money Index™ signals local financial institutions not sufficiently engaging always-on millennials

During Prime Minister Lee Hsien Loong’s National Day Message, he cited how other countries are using electronic payments to go cashless. The growing demand for mobile banking, driven by the millennial generation, is one of the reasons why Singapore needs to do more to truly enable cashless payments.

On that note, Telstra \announced a new global report, titled “Exponential Performance – in a Millennial, Mobile, Programmatic World,” which reveals that Singapore is ranked sixth out of eight markets in mobile banking usage by millennials, signalling that local financial institutions need to increase efforts to digitise their business models to capture a generation that is mobile-first and set to become the main source of industry profit.

The report includes the “Millennial, Mobile, Money Index (Telstra 3MITM)”, which observes how well financial institutions across eight markets are transforming their businesses through factors like their capacity to attract millennials, their ability to engage them through mobile, and how much millennials are investing with them. Despite Singapore having one of the highest mobile penetrations (88 per cent) of the eight markets studied, only 67 per cent of the millennial population indicated regular mobile banking use. This contrasts with market leaders US (78 per cent) and China (75 per cent).

The report also addresses technology gaps between traditional institutions and FinTechs and the fact that Singaporean financial institutions need to transform the usability of their digital services.



Millennial, Mobile, Money Index™ signals local financial institutions not sufficiently engaging always-on millennials

Singaporean financial institutions must further digitise – or risk losing out on engagement and profit from mobile-first millennials, Telstra global report finds

SINGAPORE, Thursday, 10 August 2017 – Telstra’s new global report, titled “Exponential Performance – in a Millennial, Mobile, Programmatic World,” reveals that Singapore is ranked sixth out of eight markets in mobile banking usage by millennials, signalling that local financial institutions need to increase efforts to digitise their business models to capture a generation that is mobile-first and set to become the main source of industry profit.

The report includes the “Millennial, Mobile, Money Index (Telstra 3MITM)”, which observes how well financial institutions across eight markets are transforming their businesses through factors like their capacity to attract millennials, their ability to engage them through mobile, and how much millennials are investing with them.

The report revealed that millennials will become the most valuable demographic for banks globally by 2028. In the United Kingdom (UK), United States (US), Indonesia and China, the average wallet size[1] for millennials has already exceeded all other demographics to become the most valuable group for financial institutions. In Singapore, however, wallet share[2] (22 per cent) is significantly lower than their representation in the population (31 per cent), indicating that Singapore is lagging in terms of riding the millennial value growth curve.

Telstra 3MITM also revealed that despite Singapore having one of the highest mobile penetrations (88 per cent) of the eight markets studied, only 67 per cent of the millennial population indicated regular mobile banking use. This contrasts with market leaders US (78 per cent) and China (75 per cent).

“Based on wallet size and mobile banking use, Telstra 3MITM suggests that local financial institutions have yet to fully engage with local millennials. Financial institutions in Singapore must do more to maximise this opportunity, especially considering the high mobile penetration among millennials and the profitability trajectory of this demographic. They must digitally transform their business and operating models to increase the penetration of services among millennials,” said Rocky Scopelliti, Telstra’s Global Industry Executive for Financial Services.

Transforming from legacy to peak profit performance

As part of the report, Telstra also surveyed 164 financial services executives across eleven countries using the Exponential Quotient Methodology developed by the Singularity University. The global survey found that 8 in 10 executives perceive the most significant gaps between traditional institutions and FinTechs to be in artificial intelligence, cloud, APIs and robotic process automation. These accelerating technologies are part of the operating DNA of the new breeds, with digital challengers enjoying cost savings of 67 per cent in operating expenses and 98 per cent on customer acquisition compared to traditional organisations.

“Major financial institutions in Singapore are currently behind the likes of Chinese and Australian banks in cost-to-income ratios. To shore up efficiency, they should carefully invest in the right programmable technology to radically reduce either the cost of customer acquisition or the marginal cost of service. This will give rise to a modern financial services institution that is digitally-led and can provide services that react to the needs of a demanding, mobile millennial in real-time,” said Mr Scopelliti.

In addition to addressing these technology gaps, the report also cited insights from Forrester on mobile banking functionality, which suggested that Singaporean financial institutions need to digitally transform the usability of their digital services. Out of 46 retail banks studied worldwide by Forrester, none of Singapore’s major banks ranked above the average functionality score[3] of 65 (out of 100).



[1] Wallet size is defined as total balance value of deposits and lending held by millennial
[2] Wallet share is defined as the proportion of wallet value held by millennials in a population
[3] The functionality score factors in variables such as range of touchpoints; enrolment and login; account information; transactional functionality; service features; cross-channel guidance; marketing and sales 

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