Moreover, about 41% of banked balance has now abandoned traditional channels.
Singapore banks can either be hurt or helped by fintech, as long as they can figure how to make use of them, the Monetary Authority of Singapore (MAS) revealed.
In its financial stability review, banks can have over 10% of potential cost savings in their operating income. MAS also estimated the same for Asia, where cost savings can reach up to 20%.
MAS estimates fintech payments already takes up 20-50% of household consumption if the probability of payments disintermediation is high in the next five years.
A majority of 56% of the banked population is also willing to shift their savings into a pure play digital bank. An average of 41% of total balance has already been shifted.
MAS cited DBS Digibank, which has leveraged on fintech to create a mobile-led bank for more effective and cheaper market access in India and Indonesia.
However, fintech can also disrupt banks businesses if the latter isn't positioned to embrace the new technologies.
"The potential erosion of bank income from FinTech competition could result in weaker banks. This could, in turn, pose financial stability concerns," MAS said.
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