A study by Nielsen has found that consumers are quite wary of personal loan services despite being regarded as one of the popular market entry products for virtual banks.

According to its Personal Finance Monitor that analyses customer’s perspective towards virtual banking, only a meager 18% of the customers claimed that they would consider applying for loans from virtual banks in the future.

Virtual banks could soften the blow by leveraging on credit card issuance as a way to lure in customers as over half of the respondents (54%) showed interest in virtual bank credit card applications, the report stated.

It is also worth noting that around 75% of potential virtual bank customers prefer to start using virtual banks by opening a deposit account. This report follows the news of several virtual banks launching in Hong Kong, including ZA Bank, Airstar Bank, and WeLab Bank.

“Facing competition from not only their peers but also traditional banks, virtual banks are recommended to fight for market share by putting their focuses on the most demanded services and offering competitive deposit interest rates to trigger trial usage,”

advised Eddie Au, Senior Director, Financial Services, Nielsen.

Mobile Wallet Users Are More Receptive to Virtual Banks

The study also observed the relationship between virtual bank usage intention and mobile wallet usage. Over half (51%) of active mobile wallet users who use it on a weekly basis express their intention to use virtual banking services in the future, compared with remarkably lower rates of 27% among inactive mobile wallet users and 16% among non-users.

The result is not surprising as frequent mobile wallet users are more tech-savvy and have already adopted technology for financial management. In addition, the decision of using virtual banking for customers who are not active peer-to-peer (P2P) service users could be hindered by their unfamiliarity with making cash deposits or withdrawals through the Fast Payment System (FPS).

“Given the positive relationship between virtual bank usage intention and mobile wallet usage, partnering with various Stored Value Facility (SVF) providers could help boost virtual bank usage. Alternatively, the feasibility of facilitating SVF issuance should also be explored,”

said Eddie.

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