Banks are slowly but surely harnessing the potential of mobile phones for banking services and to make it easier to conduct transactions on the go, say experts.
RFi Group, a business intelligence and digital media provider, said there is a definite shift towards going mobile, driven by increasing consumer willingness to pay through contactless cards and now, mobile wallets.
"The Asian banks are tapping into this shift in consumer behaviour and those that can move the fastest can steal first-mover advantage. Digital transformation is top of the agenda for all the banks we work with and across the market," it noted.
United Overseas Bank (UOB) has just introduced a new feature: Clients can now use a smartphone as a security device for a mobile banking transaction, so they no longer need a physical security device or token.
Banks have given out these small devices to online banking customers over the years to generate one-time passwords to complete certain transactions.
To use the phone for these passwords, customers log into the UOB Mighty e-wallet app with a personal identification number (PIN) or via fingerprint authentication. They then enter what is called the UOB Mighty Secure PIN to generate the password on their phone.
"This additional layer of security, also known as two-factor authentication, offers a more robust protection against fraudulent transactions," said UOB earlier this month.
Mr Dennis Khoo, UOB's Singapore head of personal financial services, said having a so-called digital security token "aligns with the changing needs of the bank's customers, who are using their smartphones more frequently and regularly to bank and to make payments".
The number of customers using UOB Mighty grew 43 per cent over the year, he added.
Citi has also joined the race, releasing a digital wallet for card holders last month. Singapore is the first country to use it.
Mr Vikas Kumar, Citi's head of cards and personal loans for Singapore, said: "Citi Pay is just one of a number of digitally driven and technology innovations that we will continue to introduce."
In markets with more digital immigrants - older people who have had to adapt to technology - the use of digital financial services could be slower, noted Mr Mohit Mehrotra, strategy consulting leader at Deloitte South-east Asia.
Such markets tend to have ageing populations, like Singapore.
However, Mr Mehrotra said it is clear "there is a greater desire towards development of ecosystems that support growth of digital financial services".
This article was first published on Dec 22, 2016.
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