Asia-Pacific fintechs winning the battle for customers


A focus on delivering convenience, innovation, and lower fees has paid dividends for Asia-Pacific’s fintechs, with the region’s customers revealing a clear preference for the tech-centric start-ups over traditional banks, according to Capgemini’s 2017 World Retail Banking Report.

Nearly 40 per cent of surveyed customers within the Asia-Pacific region expressed positive sentiment in their dealings with non-traditional financial services providers, seven per cent higher than the ratings for traditional institutions (at 32.6 per cent), the annual banking survey revealed.

Asia-Pacific fintechs also outperformed their European counterparts for customer satisfaction, with established players maintaining a slim 2.5 per cent edge over their tech-centric rivals (35.7 per cent for traditional institutions versus 33.2 per cent for fintechs).

However, Asia-Pacific’s fintechs fell short of the highs of their North American counterparts, who rated among the world’s best customer service performers. According to the Report, 57.8 per cent of North American customers rated their fintech experience positively, 8.3 per cent higher than the ratings achieved by established banks (at 49.5 per cent).

While banks still dominate the local market, nearly a third of Asia-Pacific customers have availed themselves of at least one fintech service, beating out their North American and European counterparts at 24 per cent and 23.6 per cent respectively.

Among all fintech customers surveyed, more than half (52.4 per cent) maintain relationships with three or more non-traditional firms.

However, the Report presented a clear generational split in preference for fintechs, with 37.2 per cent of Gen Y customers utilising non-traditional banks, versus 22 per cent for all other age groups.

“Those most likely to gravitate toward non-traditional firms are Gen Y customers and the tech-savvy, both of which have high potential. As Gen Y customers mature, they will gain in both wealth and financial need, making them increasingly important to banks, while the volume of tech-savvy individuals is set to explore as smart phones become ubiquitous and the digital-native population expands.”

Flagging customer satisfaction ratings, particularly among younger customers, present a clear challenge to the supremacy of the big banks, the Report argued.

“Alarmingly, banks are losing ground to non-traditional firms among the most desirable customer segments.”

The 2017 World Retail Banking Report polled thousands of retail banking customers around the world to gauge the impact of fintechs on the wider financial services industry and the increasing importance of application programming interfaces (APIs) in creating mutually beneficial partnerships between fintechs and established institutions.