Digital banks in Asia Pacific witnessed improving overall profitability in FY2019. Although some digital banks’ net profit in FY2020 has been affected by COVID-19 pandemic, their growth outlook remains optimistic.

These are the leading countries where new payment options are creating new opportunities and disrupting the incumbents

Retail banking sector has been the main growth driver for Indian banking sector during the past few years, as banks’ exposure to corporate banking sector has been reduced due to bad loans problems. Their retail lending has grown at a compound annual growth rate (CAGR) of 16.2% over the FY2013 to FY2018 period, making India's retail banking one of the biggest among emerging markets.

Increased utilisation of financial technology is setting the stage for further digitisation of the Philippine’s consumer banking industry, which is slowly transitioning into a “cash-lite” economy.

Mobile-based payment platform OPay has grown exponentially since its launch in 2018, penetrating the unbanked and underbanked population in Nigeria. It allows users to send and receive money, pay bills, and order food and groceries, with a network of thousands of agents.

The global financial industry has evolved as a result of the widespread digital transformation of traditional banks and the entrance of new digital banks. In the Middle East, the legal framework is slowly developing, which will open up the market to more digital banks.

A year after Hong Kong issued eight digital banking licences, Mox and ZA Bank have emerged as the early leaders. Together with WeLab, the three banks account for 86% of all virtual banking deposit in Hong Kong.

The rapid transformation of domestic and cross-border payments brings new opportunities and challenges for financial institutions.Amid shrinking payment margins, players are rethinking their business models to better monetise data insights and integrate financing options such as “buy now, pay later” (BNPL). Industry experts share their views on the impact of this changing landscape, emerging value propositions, and key technology enablers for future growth

Market development, operational challenges, and payment preferences are going to shape consumer engagement with the new instant payment platform

The inaugural BankQuality™ Consumer Survey and Rankings in the Middle East interviewed 3,000 customers in three key markets in the region on their engagement, experience and satisfaction with their main retail banks.

At the International Heads of Retail Finance Virtual Meeting on 28 August 2020, leaders from over 22 institutions in Asia Pacific, the Middle East and Africa, discussed key trends and issues impacting the industry. The rise of digital only banks, integrating lifestyle and finance through digital platforms, and improving customer experience were at the forefront of the dialogue.

The inaugural BankQuality™ Consumer Survey and Rankings interviewed 11,000 bank customers in 11 markets across the Asia Pacific region on their engagement, experience and satisfaction with their main retail banks.

Sharp rise in electronic payment incidents in Australia resulted in substantial customer disruption in 2018.

Indonesia is seeing exponential growth in mobile payments spurred by a robust fintech landscape, though usage remains uneven and limited

Pressure on margins from increased competition and compliance requirements is forcing the industry to recalibrate its trade finance offerings. While institutions know that trade digitalisation is important for the future of the business, success relies heavily on deeper coordination and collaboration between the myriad participants in the trade finance ecosystem and technology enablers

The bank onboarding process should be fast, as the most fundamental attribute of an exceptional account opening experience is speed

Implications of new regulations and emergence of digital-only players were hot button issues discussed this year at the Asian Banker Future of Finance ‘Global Transactions Re-invented’ track

Chatbots are another example of relatively low-cost advancements in artificial intelligence adoption within the banking industry. These computer programmes are designed to conduct live chats to resolve common queries and carry out specific tasks; and they are proving to be popular among customers.

Digital disruption is rapidly changing the competitive and operating landscape and driving institutions and regulators to adopt opening banking strategies and create API enabled IT architectures.

The Asia Pacific banking sector will benefit from the improving global and regional economic conditions in 2018. Overall, better asset quality is expected, and banks will maintain relatively stable profitability and capitalisation. Nevertheless, there are growing concerns over the potential asset price corrections, high private debt, and geopolitical risks.

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.

The Internet of Things offers potential opportunities in retail and corporate banking and will fuel the rise of new types of clients in the form of smart cities and autonomous artificial intelligence driven market agents.

New players and technologies continue to drive change in the transaction banking space in Asia Pacific, causing incumbent banks to focus more on improving customer experience and reviewing existing business models.

The last four years have been considered the worst for Thai banks in retail banking. Despite a meagre income and loan growth, banks have been working hard to improve operating efficiencies, re-balance portfolios, and build digital platforms to support the country’s next phase in e-payments, internet financing and micro lending.

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.

As data analytics becomes nearly ubiquitous in most parts of consumers’ digital lives, leading banks are providing digitised solutions that deliver the right offer at the right time, predict fraud so they can reduce risk, and boost cross-sell rates.

Declining profitability from lending is forcing Japanese banks to rethink product and service strategies whilst innovative technology adoption is helping to maintain high service levels

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.

Emirates NBD’s efforts towards digitisation have enabled customers to bank with more ease through new account propositions. From Shake n’ Save to Fitness and other new mobile based applications, the bank is putting itself at the forefront of digital services.

Financial institutions are starting to use APIs to create important linkages between their products and services and their customers and important third party value providers. Early movers to stand to gain mindshare of both customers and the wider application developer community.

DBS Group’s retail and wealth business has been accelerating income generation since 2013. However, the bank continues to face an uphill struggle with some of its overseas retail markets.

While many financial institutions in emerging markets are trying to strike the right balance between their physical footprints and digital presence, leading banks in mature markets are proving that digital transformation can boost profitability and efficiency.

Wide discontent with conventional banks have led to the emergence of mobile-only fintech banks. However, these challenger banks are struggling to expand their customer reach, putting doubts whether they can stand against bigger traditional banks.

As the search for efficiency intensifies amid a slowdown in economic growth, banks continue to leverage technology to relieve cost pressures and provide increasingly complex working capital solutions that their clients demand.

The Asian Banker recently updated the bank profile of Asia Commercial Bank. The bank is focused on boosting its competitiveness in the Vietnamese market.

Despite current economic challenges, Vietnam’s banking sector has promising longer term potential due to its relatively young and increasingly affluent population.

State enterprises form one of the largest customer segments of Krung Thai Bank. But this does not confine the bank, as it enters the nongovernment retail deposit market driven by a mix of competitive pricing and products, process innovation, and a strong branch network.

Banks are integrating new technologies into their core businesses to improve their digital banking presence and speed-to-deliver

Australian banks are moving towards increased digitalisation, leveraging technological advancements to ensure seamless customer experience in providing better retail banking products and services.

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.

As trials move into actual implementations, global financial markets and monetary systems will be disrupted and transformed.

Regulators in African countries are exploring the role of open banking in financial services. This push is reflected by the diverse opportunities that open banking can provide to financial services and end-customers.

Chinese private banks are upgrading philanthropic planning services to cater to increased demand following the country’s ‘common prosperity’ policy

Growing transaction volumes are pushing Indian banks to rethink technology architecture to integrate cloud and data capabilities to meet growing transaction volumes. Indian fintechs and digital players see consumer growth, but also increased expectations and competition.

By combing various technologies such as artificial intelligence, big data, 5G, and internet of things, edge computing is a viable solution to issues such as data latency, waste of bandwidth and possible security breaches.

The failure of Silicon Valley, Silvergate and Signature banks was caused by asset-liability mismatches, interest rate hikes and insufficient diversification, with many other US banks set to crack

Consumers chose Indonesia’s Bank Central Asia as the Most Recommended Retail Bank, and DBS Singapore as Most Selected Main Bank in APAC in the 2023 BankQuality Survey

The current disintermediation in payments and MSME lending marks the tip of the iceberg, and retail deposits may be the next battleground

The financial services market size in the metaverse is predicted to drop from 22% to 6% by 2030—its fall from tech wonder to half-baked idea in financial services requires differentiation in its value proposition to secure success

With a large portion of Africa’s population still lacking access to traditional banking services, particularly in places banks fear to tread, payment providers have stepped into the breach, gaining in popularity for offering services beyond the usual payments, money transfer and savings

According to a TABInsights survey on technology investment, FI in APAC prioritise data management, advanced analytics and digital banking capabilities

In a recent survey conducted by TABInsights, the research and consulting arm of TAB Global, banking professionals highlighted AI integration in finance. The top concern, with 48% support, is skill specialisation. This means leaders need to nurture AI skills across different roles, from entry-level business analysts to mid/senior data engineers and data scientists.

Transaction banks in the Middle East are expanding services in non-oil businesses with high growth potential, in line with economic diversification, and to mitigate geopolitical instability in countries in the Gulf Cooperation Council

Nubank has reported its first full-year profitability since its launch in 2014. Nearing 100 million customers, the bank has set new benchmarks in revenue

JPMorgan Chase, China Construction Bank, and Emirates NBD claimed leading spots in this year’s ranking, with JPMorgan Chase standing out in retail financial performance and digital customer base

The popularity of Bank Central Asia reflects a trend of traditional banks embracing digital innovation to meet customer preferences

China‘s private banking sector has witnessed a significant migration of high-net-worth individuals to the country‘s largest banks, underscoring a flight-to-safety trend and intensifying competitive pressures for smaller banks.