Digital Banking Competition in Southeast Asia Should Intensify as there’s been a Boom in Fintech Investments:
According to the Fitch Rating report, the non-banking population in Southeast Asia is about 290 million. According to the report, only 18% of the population in Southeast Asia has access to credit, less than the percentage of the digital population, according to data from the World Bank’s Global Findex, 37%.
The Association of Southeast Asian Nations (ASEAN) is a group that includes Cambodia, Brunei, Indonesia, Laos, Malaysia, Singapore, Myanmar, Philippines, Thailand, and Vietnam. According to Fitch’s rankings, the Philippines and Indonesia have great market potential in the top six ASEAN markets, thanks to their large banking sectors.
Big investments in Southeast Asia
• According to S&P Global Market Intelligence’s APAC financial report, investments in the Asia Pacific grew 9.1% in 2020, or $1.4 billion in 2020, compared to the first quarter.
• Fintech’s funding in Asia was led by Southeast Asia and Australia. Both regions raised $455 million and $369 million, respectively, nearly tripling the amount raised in the previous quarter.
• Foreign investment in fintech companies in Southeast Asia increased sixfold, according to the Future Fintech Southeast Asia report by Dealroom, Finch Capital, and MDI Ventures. Active investors include Tencent, Ant Financial, Sequoia, Accel, SoftBank, and Warburg Pincus
Opportunity in Southeast Asia
• Southeast Asia has a population of 570 million and GDP is expected to reach $4.7 billion by 2025. The financial sector has enormous potential if the large uninhabited population is served and fills millions. Some of the financial gaps for small and small businesses
• Southeast Asian countries are one of the fastest-growing regions in the world
• Fintech companies in South Asia are worth a total of $10 billion, including MoMo and VNPay in Vietnam, Indonesia, Akulaku, Ovo and PayFazz, and FinAccel in Singapore, according to the report of the highest-rated fintech companies. $250 million each
• The report states that a large population of incompetent people and approximately 22 million people enter the mobile age annually with a booming Internet economy. Southeast Asia has huge growth opportunities for local and foreign fintechs.
South Asia’s global technology ecosystem is currently worth $108 billion. Singapore, Indonesia, the Philippines, Vietnam, and Malaysia are some of the valuable technological ecosystems.
According to the analysis, fintech’s solutions will help strengthen financial integration and increase emerging markets’ GDP by $3.7 billion. Southeast Asia experienced a boom in Fintech investments last year. Banking competition will increase as virtual banks enter the market.
Emerging markets in Southeast Asia are likely to see growth in digital financial services. According to the report, digital payments from Vietnam, Indonesia, and the Philippines will grow at a CAGR of 10-13% in 2025, compared to 3% in Singapore. The total amount of digital lending from these three countries is expected to increase by more than 50% CAGR by 2025.
The COVID-19 pandemic may have hit the region’s economy.
The government needs to take adequate steps to address the challenges, especially the lack of access to digital financial services for local consumers and businesses.
Using digital banking services, banks and financial institutions can make banking services simple, affordable, and affordable for the large unbanked population in Southeast Asia. Nelito’s FinCraft Digital Banking Suite helps financial institutions deliver engaging digital banking experiences and is designed to build, engage and expand customer relationships. Fincraft™ offers the Omni-Channel digital banking package that includes basic banking, mobile banking, Internet banking, and banking solutions. It enables institutions to drive innovation and growth, deliver a seamless customer experience, conduct exceptional operations and gain a competitive advantage.