In the Asia Pacific region, skilled and experienced tech professionalsand regulatory compliance specialists will find themselves well-positioned in the banking and financial services market
Chinese banks’ mortgage loan growth dropped the most in 2017 and will continue to be affected by property cooling measures and relatively tight liquidity conditions. Hong Kong banks’ mortgage loan growth, on the other hand, increased, but they are not expected to maintain it due to tough operating conditions.
Technological disruption is reshaping the payment landscape, creating a tight mobile wallet business environment. Banks must reshape their strategies that will help enhance their competitiveness in this market.
Digital-only banks pose serious challenges to the traditional financial services industry with their entirely new banking experience. However, for most of them, licensing, scale and profitability are the three key issues they must face going forward.
Household indebtedness has been on the rise, which is putting future economic growth and financial stability in jeopardy. Thus, many central banks have unveiled measures to curb high household debt. In Asia Pacific, Australia and South Korea are facing the most serious household debt problems.
The Asia Pacific banking industry will continue to see a rise in demand and salary among highly skilled technical workers in the backdrop of ongoing digitalisation.
Retail asset quality pressure will persist in the Asia Pacific region, due to slower economic growth and worse employment situations. However, the downside risk to banks’ retail asset quality will remain manageable, as regulators and banks continue their efforts to better manage credit risk.
Most Asia Pacific markets have witnessed a slowdown in unsecured consumer loan growth, as regulations tighten and more alternative lending options are made available to borrowers. To stay relevant, banks are slowly digitising the business while also closely monitoring credit quality.
Asia Pacific markets have seen a shift towards digital banking during the past few years. Nowadays, banks are placing more effort on mobile banking, such as improving security and convenience of their applications and enhance the user experience to drive engagement in the channel.
Composition of retail banking assets among Asia Pacific countries shows that mature markets have a higher average share of mortgages in retail lending than emerging markets, while banks in emerging markets have expanded their mortgage lending at a stronger pace.
Banks are expected to see continued growth in auto lending due to economic development but growth will be dampened by the rise of ride-sharing services.
The gross retail banking income for the entire region will grow by 8% by the end of 2017 after showing a year-on-year growth of 7.5% in 2016 and 10% in 2015.
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