What is the Financial Well-Being Spectrum in Singapore?

What is the Financial Well-Being Spectrum in Singapore?

Singaporeans were already struggling with multiple financial issues before the COVID-19 pandemic. Many felt anxious about their financial future. Consumers’ finances have been further affected by the pandemic, many feeling less confident and able to manage their finances in the future.

Financial well-being doesn’t mean having a certain amount of savings or investments. It is about people feeling confident that they can manage their finances day to day and plan for the future. Financial security can be defined as whether a person is able to pay their bills on schedule or save money for an unexpected medical expense. Others feel financial security is having enough money to sustain their lifestyle until the end.

Financial services firms are focusing more on customers‘ financial well being. They’re trying to understand customers’ financial needs better and create products and services that can help them reach their financial goals. Forrester’s Financial Wellbeing Segment allows firms to better assess their customers’ financial resilience and attitudes toward their financial situation.

Segmentation of Forrester’s Financial Well Being

Forrester's Financial Well-Being Segmentation

Four distinct financial well-being segments for Singaporeans

We surveyed 1,130 Singaporean online adults in 2021 to help financial service firms better understand their consumers’ financial well-being.

  • Security Seekers account for thirty percent of Singaporean customers.Although they don’t live from paycheck to paycheck, security seekers are concerned about their financial future. Their top financial concerns include managing their finances, investing, planning for retirement and how to invest. 28% feel uneasy about their finances while 26% feel secure.
  • 28 percent of Singaporeans are Carefree Spenders.The Carefree Spenders are able to live from paycheck to paycheck and not worry about their financial future. They lack the knowledge and skills to plan for retirement, save money, and invest. They still consider their current financial situation to be stable and comfortable.
  • Twenty-five percent are Singaporean consumers Spending Stretched. The Stretched Spenders are those who live from paycheck to paycheck and worry about their financial future. They face the biggest financial challenges in managing their money, investing, and paying for daily necessities. Sixty-two per cent of respondents feel overwhelmed by debt and 73% claim that it negatively affects their ability to pay their bills. They described their financial situation as uncertain, stressful, and anxious when asked.
  • Cushioned Savers account for 19% of Singaporean customers.The cushioned saver doesn’t have to live paycheck-to-paycheck and is not worried about their financial future. This group is not subject to financial hardships. They still face financial difficulties, including planning for retirement, investing and buying a home. Most Cushioned Savers consider their current financial position to be stable and comfortable.

In the current climate of uncertainty, it is easy to understand why Security Seekers are higher than others. Singaporeans are being more cautious in saving and keeping an eye on their finances, and many have started to save for emergency funds. COVID-19 has ruined even the best-resourced retirement plans. Even for those who don’t live hand to mouth, and have built up savings over the years, it can be difficult to plan for the future or know how to invest.

Firms can use these four segments to map their customers and gain insight into financial habits, behavior, and interest in specific financial management tools, advice, or services. Financial services firms can better tailor the financial experience of their clients by understanding their customer segments.

Our upcomingAPAC Financial Services Webcast Series 2021In this session, I will show you how to create a more relevant segmentation system that improves the financial well-being for your customers. This topic will be discussed in my session on the 28th of July. Register herehttps://go.forrester.com/apac/financial services/