Financial professionals plan to invest in loyalty initiatives to combat competition and regulation in Singapore

13 February 2015
Senior executives at Singapore financial services organisations plan to invest in customer rewards and loyalty initiatives to counter the increasing challenges they face from competitors, regulators, and a rapidly evolving customer base. This is the key finding of a survey of financial services board members and senior management commissioned by Collinson Group, a global leader in influencing customer behaviour.

The research finds that increased competition and customer profitability are perceived by Singaporean financial services executives as the key challenges for their businesses - voiced by 68% and 61% respectively.

Over half of respondents (57%) also say regulatory pressures are a real cause for concern.

In order to combat these pressures, the majority want to get a better understanding of customer lifetime value and they plan to invest significantly in customer rewards and loyalty initiatives in the coming year.  Over half (52%) believe that improving the customer experience across multiple touch points is a key investment priority for them.

Financial professionals in Singapore are the most intent on understanding and rewarding their customers, compared with the other regions covered by the study, the UK and the UAE.

All responders agree that increased competition and customer profitability are the most concerning challenges

Mismatch between board and mid-management with regard reduced interchange fees

The study also highlights a clear mismatch between what board members and senior management perceive reduced interchange fees to mean to their business. Interchange fees are the transaction payments that banks pay each other for processing credit or debit card payments, which regulators in many markets have recently capped at lower than usual levels.

Reduced interchange fees are cited as a key concern by 57% of board members while only 29% of senior management and 10% of mid-management see that as the case.

Christopher Evans, Joint CEO, Collinson said: "It is encouraging to see that financial services professionals in Singapore are committed to investing in and focusing on reward and loyalty initiatives to achieve their business goals, across both board and mid-management.

"The differences in perception regarding the threat of reduced interchange fees may be due to the different responsibilities of board and senior level management. The board are required to have a longer term view of performance and are accountable for longer term profits, whereas senior management are tasked with delivering quarterly and annual targets."

Evans continues, "There is an increasing trend towards brands prioritising the need to gain richer insight and build deeper emotional engagement with customers, globally.  While several travel and retail brands have led the way here, we know that the opportunity for financial services providers is significant and largely untapped.

"Providers can increase loyalty and profitability by doing two things really well.  Firstly they need to invest in capability that delivers robust customer insights, and secondly, they should seek to add value at all interaction points in a relevant way. Getting this right takes time, so it is important for banks to start building the foundations now.

"For banks to reap the reward of investment in customer experience and loyalty, the initiatives need endorsement at the highest level in the business, insights need to be shared across the organisation, and the process of improvement needs to be integral to the organisation and continuous." 

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