Singaporeans insecure about financial future despite healthy economy
By Digital News Asia November 4, 2019
- Talent under societal pressure to stay competitive where opportunities are limited
- Data and insights gives people access to customised financial solutions
Asian financial supermarket GoBearcommissioned an online survey with over 4,000 respondents from Hong Kong, Indonesia, Singapore and Thailand, to better understand the financial health of people across the region.
Specifically, the Singapore startup aimed to identify common gaps around personal finance – from financial literacy, to financial security and financial knowledge. Findings confirmed that based on people’s financial choices and behaviours across the region, Singapore is the most financially healthy country scoring a 68 out of 100 in the GoBear Financial Health Index (FHI) compared to Hong Kong SAR (64), Thailand (61) and Indonesia (60).
Singaporeans downcast about their financial future
Despite securing a relatively healthy score in GoBear’s FHI, an unexpected 41% of Singaporeans do not feel optimistic about their financial future. According to behavioural finance and market psychology expert Wong Kon How (pic, right), a great deal of these insecurities comes from societal pressures.
“This past year, GDP growth in Indonesia was 5.05%, while in Singapore it was only 0.6%. As a developed nation, we’re limited when it comes to our GDP growth since we can’t rely on the supply and demand of natural resources like other countries. Instead, we’ve invested our future on other high value-added activities in the manufacturing and services sectors. But this leaves our talent under constant pressure to keep up and stay competitive in a space where opportunities are narrow and limited,” he said.
“On top of that, we’ve become accustomed to a certain quality of life and feel the added pressure to keep up appearances within our community. And it’s all of this pressure combined that’s led to our lack of financial optimism.”
Singaporeans also feel a lack of confidence when it comes to their financial health, which is creating financial insecurities and gaps. Despite 91% of Singaporeans claiming to have at least an average level of financial knowledge, 43% do not feel financially secure and 1 in 3 say they don’t know how to grow their wealth effectively.
Asset rich, but cash poor
While Singaporeans seem to have a handle on their overall financial health, a surprising 21% of Singaporeans claim they cannot live beyond a month if they were to lose their main source of income.
According to Wong, this is largely because Singaporeans have their cash earnings tied to investments like their CPF and property ownership. Despite being tight on cash, they are taking no action to grow their wealth or manage their money effectively, with 25% believing that investing is very risky and 1 in 5 still keeping hard cash at home in their piggy banks.
Overall, the survey concludes that Singaporeans have a myopic approach to financial health. 56% of Singaporeans claim that becoming financially independent is a top priority to save money. However, their quest for financial independence is beyond their control, with 1 in 2 (54%) saying the cost of living is outpacing their earnings.
With all the financial pressures Singaporeans face, it is even more important be smart and savvy when it comes to managing their money. GoBear’s Singapore Country Director Winston Ng (pix, left) explains, “There’s no one-size-fits-all approach when it comes to managing our financial health. Everyone has different needs and are at different stages of life, but we can always improve our understanding of ways to make our money work harder.
This is where GoBear comes in. As a financial supermarket, our technology gives people access to customised financial solutions. All they have to do is tailor their search by their needs and be matched to the relevant products. Our data and insights mean we can work closely with partners to build better products, improve overall access to financial products, and identify user knowledge gaps to continue to offer the most relevant solutions.”
GoBear believes financial health leads to secure, stable, and sustainable communities across Asia, which explains its mission to improve financial health by making financial literacy, financial inclusion, and financial security attainable for everyone.
The company has plans to improve financial health in Singapore and across the region through educational programmes and a refined approach to product development, enabling the brand to address the unique challenges of each market. This includes developing a simplified online quiz slated to launch on the brand’s website next month, so visitors can identify their financial personality to start taking active steps to improve their financial gaps.
Winston Ng added: “Understanding where the gaps are will help GoBear drive meaningful initiatives in the region. In Singapore specifically, we need to help change people’s mindsets to shift away from the pressure they feel, and focus on the proactive steps they can take towards a more financially healthy future.”