Hong Kong, Singapore play catch-up with mobile banking apps

European financial firms dominated the global top ten of Sia Partners’ study.

Hong Kong and Singapore are still playing catch-up to their European counterparts when it comes to their mobile banking apps, but has shown much progress in recent years, according to a report by management consulting firm Sia Partners.

In the study, Sia Partners found that the global top ten when it comes to mobile banking apps is fully composed of European-based neobanks and European-based banks. This is a result of the recent entry of digital banks in the market, as well as preparations for open banking following the entry of the payments service directive (PSD2).

PSD2 refers to the European Union’s directive to regulate payment services and payment service providers, aimed at increasing competition.

“Following the market entry of neobanks like Revolut and N26 and the entry into force of PSD2, several European banks have recently invested massively in their apps and are now one step ahead of their counterparts in Hong Kong and Singapore,” noted Etienne Ranwez, manager digital banking at Sia Partners, Hong Kong.

The study noted that mobile apps of European banks have the advantage against their Asian peers due to their broader catalogue of functionalities, which are easier to use and more often customizable.

They also typically offer better in-app advice on investments and banking products, noted Sia Partners.

On the upside, the Hong Kong and Singapore apps score better on payments and on having local features to meet local preferences across different markets.

Compared to Europe, which has a unified payments market, Hong Kong and Singapore have well-connected global platforms, but are also quite independent. Both cities have implemented instant payments solutions based on a link between bank accounts and phone numbers: Faster Payment Scheme (FPS) in Hong Kong and Fast and Secure Transfer (FAST) in Singapore. These functionalities are often well-integrated into the mobile banking apps, significantly simplifying payments, noted Sia Partners.

“Multicurrency accounts are also a plus that most European apps do not provide. Finally, it is worth noting that European apps tend to score higher in app stores than their Hong Kong and Singaporean counterparts,” the report added.

Amongst banks in Asia, DBS was noted to have the best user experience with its iWealth and Digibank apps, a customer automatically switches from Digibank to iWealth upon reaching a given amount in deposits.

In Hong Kong, HSBC and Hang Seng Bank were reported to be the top-performing mobile apps in the city. Virtual only lender ZA Bank still reportedly has limited features as the neobank only recently launched, similar to European neobanks.

“However, its app already provides some interesting features and UX, and can be considered a sub-top app, with a decent user experience,” the report continued.

In contrast, Hong Kong’s Bank of East Asia (BEA) and Dah Sing Bank have the least comprehensive apps of those in the sample, the report found.

“They are also the last two remaining family-run Hong Kong banks, and have arguably relied more heavily on their historical clients and branch networks than on their mobile solutions,” added Sia Partners.

The study, conducted in Q1, made use of 50 criteria related to features or functionalities allowing the user to conduct specific daily banking actions, whereas another 30 criteria relate to user experience. The same criteria are used to compare apps across the world. They were also tested on both Android and Apple devices, and app store ratings are included in the global score, according to Sia Partners.