Asian banks have become major global players, but now face challenges from slowing growth and increasing competition. While Asia previously led in innovations like digital payments, traditional banks must now reinvent themselves for the digital age. Open banking regulations are increasing competitive pressures as they require banks to grant access to customer data and payments. To survive this disruption, Asian banks will likely need to consolidate and leverage their scale, customer relationships, and risk expertise to reinvent their business models.
The document analyzes private equity opportunities in Southeast Asia, specifically in Fintech in Indonesia, consumer retail in Vietnam, and food manufacturing in Thailand. It finds that the Fintech lending space in Indonesia is nascent but has strong growth potential, especially in lending to SMEs who lack access to traditional bank financing. Within this, Modalku is identified as a potential investment target in Indonesia, as a leading Fintech lender that has not raised equity funding recently, despite competitors doing so.
The World Payments Report 2012 shows a healthy 7.1% gain in non-cash payments volume globally. But volume is only part of the story for the payments market, which is growing and changing in new and exciting ways. Payments continue to grow amidst volatility and increasing regulation, however the payments instrument mix is evolving fast and will never be the same.
- Richard Cant testified before the US-China Economic and Security Review Commission on US access to China's consumer markets, with a focus on e-commerce and logistics.
- China's e-commerce market has grown rapidly in recent years and is now the largest in the world, dominated by online marketplaces like Taobao, Tmall, and JD.com. Mobile commerce also plays a large role in China.
- However, it can be difficult for foreign companies, especially smaller ones, to access these large Chinese marketplaces due to high barriers to entry including requirements to have a physical presence and retail store in China. Dedicated international marketplaces like Tmall Global and JD Worldwide also have strict requirements.
Eyes wide shut: Global insights and actions for banks in the digital ageIgnasi Martín Morales
We know what banks want to achieve.
We know how they can achieve it. What we
want to explore further is how close banks
are to achieving their digital goals, both
now and over the next few years. So we
asked 157 senior IT executives, CIOs, CTOs
and other heads of technology spanning
14 primary markets for their thoughts on
digital banking’s potential for today – and
tomorrow. This paper presents the findings
of our study and examines the implications
of our findings for banking technology
executives.
What does RETAIL have to do with BANKING?!?!?funwa akinmade
Retail banking refers to banking services provided to individual consumers and small-medium enterprises rather than large corporations. The document discusses retail banking strategies and innovations. It analyzes customer segmentation in retail banking based on income levels and provides examples of common banking products and services targeted at each segment. The document also discusses how retail banking is similar to retail trade in focusing on sales and products. It emphasizes that retail banks must comply with know-your-customer regulations unlike retailers. In conclusion, the key takeaways focus on strategies for effective retail banking segmentation, product design, and regulatory compliance.
This document discusses Vietnam's promising retail market opportunities. It begins by outlining Vietnam's strong macroeconomic outlook, including forecast GDP growth of 6.5% annually, the fastest growing middle class in Southeast Asia at a 9.2% CAGR, and potential for rapid future urbanization. Vietnam also has high levels of private consumption, FDI inflows, and political stability compared to other Southeast Asian countries. The retail market is growing rapidly due to Vietnam's young population and rising disposable incomes. Modern trade is expanding while e-commerce remains in early stages but shows significant long-term potential.
This document discusses trends in China's consumer market and opportunities for American companies. It outlines three phases of consumer growth in China from 1994 to the present: 1) The emergence of early consumers from 1994-2000 with 100 million people having disposable income. 2) Rapid consumer boom from 2000-2012 where 300-400 million had income. 3) The current "Age of the Super Consumer" from 2012 onward with 800 million Chinese having varying levels of income. It emphasizes that e-commerce ubiquity, effects of globalization 2.0, and the global Chinese consumer demographic are key realities American companies must embrace to succeed in China and globally.
The document provides an overview of the transformation taking place in the lending market. It discusses the large amount of startup activity and funding in lending technologies. While traditional lenders are still dominant, cracks are starting to appear as lending startups adopt new approaches to assessing credit risk and directly connecting borrowers and lenders. The document predicts that alternative credit assessment methods will become mainstream and that banks will be forced to partner with startups to improve customer experience and returns. It also suggests that many phase 2 lending startups are likely to fail or be acquired.
The document analyzes private equity opportunities in Southeast Asia, specifically in Fintech in Indonesia, consumer retail in Vietnam, and food manufacturing in Thailand. It finds that the Fintech lending space in Indonesia is nascent but has strong growth potential, especially in lending to SMEs who lack access to traditional bank financing. Within this, Modalku is identified as a potential investment target in Indonesia, as a leading Fintech lender that has not raised equity funding recently, despite competitors doing so.
The World Payments Report 2012 shows a healthy 7.1% gain in non-cash payments volume globally. But volume is only part of the story for the payments market, which is growing and changing in new and exciting ways. Payments continue to grow amidst volatility and increasing regulation, however the payments instrument mix is evolving fast and will never be the same.
- Richard Cant testified before the US-China Economic and Security Review Commission on US access to China's consumer markets, with a focus on e-commerce and logistics.
- China's e-commerce market has grown rapidly in recent years and is now the largest in the world, dominated by online marketplaces like Taobao, Tmall, and JD.com. Mobile commerce also plays a large role in China.
- However, it can be difficult for foreign companies, especially smaller ones, to access these large Chinese marketplaces due to high barriers to entry including requirements to have a physical presence and retail store in China. Dedicated international marketplaces like Tmall Global and JD Worldwide also have strict requirements.
Eyes wide shut: Global insights and actions for banks in the digital ageIgnasi Martín Morales
We know what banks want to achieve.
We know how they can achieve it. What we
want to explore further is how close banks
are to achieving their digital goals, both
now and over the next few years. So we
asked 157 senior IT executives, CIOs, CTOs
and other heads of technology spanning
14 primary markets for their thoughts on
digital banking’s potential for today – and
tomorrow. This paper presents the findings
of our study and examines the implications
of our findings for banking technology
executives.
What does RETAIL have to do with BANKING?!?!?funwa akinmade
Retail banking refers to banking services provided to individual consumers and small-medium enterprises rather than large corporations. The document discusses retail banking strategies and innovations. It analyzes customer segmentation in retail banking based on income levels and provides examples of common banking products and services targeted at each segment. The document also discusses how retail banking is similar to retail trade in focusing on sales and products. It emphasizes that retail banks must comply with know-your-customer regulations unlike retailers. In conclusion, the key takeaways focus on strategies for effective retail banking segmentation, product design, and regulatory compliance.
This document discusses Vietnam's promising retail market opportunities. It begins by outlining Vietnam's strong macroeconomic outlook, including forecast GDP growth of 6.5% annually, the fastest growing middle class in Southeast Asia at a 9.2% CAGR, and potential for rapid future urbanization. Vietnam also has high levels of private consumption, FDI inflows, and political stability compared to other Southeast Asian countries. The retail market is growing rapidly due to Vietnam's young population and rising disposable incomes. Modern trade is expanding while e-commerce remains in early stages but shows significant long-term potential.
This document discusses trends in China's consumer market and opportunities for American companies. It outlines three phases of consumer growth in China from 1994 to the present: 1) The emergence of early consumers from 1994-2000 with 100 million people having disposable income. 2) Rapid consumer boom from 2000-2012 where 300-400 million had income. 3) The current "Age of the Super Consumer" from 2012 onward with 800 million Chinese having varying levels of income. It emphasizes that e-commerce ubiquity, effects of globalization 2.0, and the global Chinese consumer demographic are key realities American companies must embrace to succeed in China and globally.
The document provides an overview of the transformation taking place in the lending market. It discusses the large amount of startup activity and funding in lending technologies. While traditional lenders are still dominant, cracks are starting to appear as lending startups adopt new approaches to assessing credit risk and directly connecting borrowers and lenders. The document predicts that alternative credit assessment methods will become mainstream and that banks will be forced to partner with startups to improve customer experience and returns. It also suggests that many phase 2 lending startups are likely to fail or be acquired.
Towards the Digital Age of Retail Banking and the Omnichannel ConsumerIQads
This document provides a summary of a whitepaper report on the digital transformation of the retail banking industry in Romania. The 3-chapter report includes analysis of macroeconomic trends, an overview of the Romanian banking market, and results from public opinion surveys. It discusses key digitalization trends in banking, including simplicity, integrating services, and tailored experiences. Charts show most Romanians use internet banking for balances and payments, and opinions on saving habits and the role of cash versus cards. The document aims to help professionals understand the future of retail banking and digitalization.
Cash is still dominant in Japan, accounting for over 80% of transactions in 2014. However, card usage is growing, reaching 16% of payments that year. The largest card network in Japan, JCB, is looking to expand internationally to drive business growth, as the transition to digital payments is slow domestically. JCB has partnered with banks in countries like Russia, Myanmar, and Mongolia to begin issuing co-branded cards. This international expansion helps offset the current dominance of cash in Japan.
This document summarizes trends in the Australian banking market focused on Generation Y (Gen Y). It finds that Gen Y is more digitally engaged than older generations, with over half using mobile banking weekly. Gen Y is also more likely to apply for banking products digitally and to switch their main bank. As Gen Y grows in economic influence, their preferences for digital-only banking could undermine traditional branch-based models and provide opportunities for new digital-focused entrants. Established banks may need to adapt to remain competitive as Gen Y expects lower fees, better rates and a more digital-first experience.
India's fintech sector is growing rapidly, fueled by a large market base, innovation, and supportive government policies. Several startups offer fintech services like peer-to-peer lending, payments, remittances, and personal finance management. Both traditional banks and new fintech companies are disrupting the financial sector by using technology to improve access and efficiency of financial services. While fintech startups face challenges in scaling up, the large untapped market and supportive regulations provide opportunities for expansion. Collaboration between fintech and traditional banks also has potential to foster innovation and inclusion.
The Banking-as-a-Service 2.0 report is an in-depth analysis of the fast-evolving BaaS segment. In this report, we analyze the global landscape of specialized FinTech companies and banks that have BaaS as core to their business, funding and investment patterns since 2018, regulatory & market drivers, and a host of industry expert opinions.
1) ANZ embarked on a strategic transformation 5 years ago to become a "super regional bank" with a focus on the Asia Pacific region, as growth opportunities shifted to Asia.
2) Under this strategy, ANZ has significantly invested in expanding its presence in key Asian markets like China, Indonesia, Vietnam, and India.
3) ANZ's managing director of retail banking stresses that the retail business is critical to implementing the regional strategy, as it provides deposits, liquidity, and brand connectivity to customers across markets.
This document discusses the transformation of the global payments landscape from 2020 onwards. It predicts that payments will be fundamentally reshaped by technology, changing customer expectations, globalization, and regulation. Payments providers will need to view payments strategically and offer value-added solutions linked to broader commercial activities to remain competitive against new entrants like technology companies. The payments market is already transforming through the growth of alternative payments methods, particularly in developing regions. By 2020, the world of payments is expected to be virtually unrecognizable from today.
Digital challenger banks are simplifying the financial world, creating a customer centric approach to services, and transforming the way banking is viewed by the public and the market
Kakao Bank - Trailblazing Neobank from South KoreaSam Ghosh
Kakao Bank was launched in the year 2017 as part of the Kakao Corp. Within 24 hours, Kakao Bank enrolled 300K subscribers, 2 million in 15 days. As of the end of 2020, this South Korean Bank had more than 13 million users, around a quarter of the South Korean population. The bank has reached a loan book size of 20.3 trillion KRW (US$17.94 billion). The operating income for the bank stood at 804 billion KRW (~US$708 million) with 113.6 billion KRW (~US$100 million) net profit in FY2020.
Just after 3 years of its launched Kakao Bank is already planning IPO and is valued at around 10 trillion won (US$9.15 billion).
Let us learn about Kakao Bank.
FinTech's innovation in the financial sector means financial technologies that are linked to the spirit of an era. FinTech's aspirations have a mainstream line that can be found on any continent, such as services related to basic banking processes, such as one touch or mobile purchases. At the same time, there are services that are only linked to continents, such as African SMS payment or the Asian micro payment system. In this study, we want to present Asian fintech efforts, such as Taobao, Tmall, Jingdong or Yu'e Bao, with no transaction costs, zero entry barriers, and broad support. The main issue with continental fintech processes is that there is only a demographic reason for different services or more?! It is also a question of building a fintech service from top to bottom (Alibaba) in Asia, or can it be built from bottom to top (Yu’e Bao)?
The document summarizes key findings from the World Payments Report 2014 regarding global non-cash payment markets and trends. It finds that while global non-cash transaction growth rates slowed in 2012 compared to 2011, growth is expected to have accelerated in 2013. Growth continues to be driven by debit and credit cards, though at a slower pace. Developing markets are establishing initiatives to boost non-cash volumes and some countries may surpass North America and Europe in non-cash transactions over the next five years. Hidden payments are also growing as payments move away from regulated banking, though data on these markets remains limited.
A paradigm shift in the modus operandi of commerce across the globe has been significantly influenced by the payment card industry with brisk strides in digital technology. The blooming payment card industry has escorted the prosperity in economic growth of most of the countries. Besides, there exists a divergent level in subsuming card payment by different countries due to distinct social, economic and cultural background. In India, excessive use cash payments are due to offbeat business models and varied distinction in literacy levels. This paper aims to analyse outstanding payment cards in India by examining the number of cards in operation and the value of transaction in the past decade. Data from RBI source is collected to analyse for a period of eight years (2011-2019). The research finds that credit card penetration has increased by threefold with average growth of 15% YoY and debit cards increased by more than threefold with average growth of 19% YoY during the period of analysis. Yet, asymmetry between debit cards holders and credit card holders exists in India indicating credit card is still niche product. This provides platform for the payment card industry to unleash the potential to tap market in India.
This document provides an overview of financial technology (fintech) in India. It notes that India has a large population that is young, mobile, and growing rapidly. The fintech market in India is poised for significant growth, especially in digital payments via mobile devices. Mobile banking and digital payment solutions have potential to better serve small businesses and help move India towards a more cashless society. The document outlines several trends in Indian fintech including growing smartphone and internet usage, and opportunities in areas like lending, payments, remittance, and banking technology.
Future of Financial Services - Banking on Innovation - Final PaperJohn Fearn
This document discusses the political barriers to innovative financial services. It argues that while radical change in any sector poses challenges for politicians and regulators, the pace of financial innovation is leaving policymakers behind. It analyzes the political reputations of alternative finance providers, payments services, and high street banks to identify the challenges these firms face in influencing regulation. The document predicts that in the near future, most transactions will be digital, mobile payments will increase, and banking services will fragment across new providers, with 20% of lending from alternative sources. It argues that widespread mobile adoption and the 2007-2009 financial crisis have enabled this radical change by shifting consumer habits and eroding trust in large banks.
201404 Retail-Banking-2020-Evolution-or-Revolution by PwCFrancisco Calzado
Powerful forces are reshaping the banking industry towards 2020. Global macro-trends like the rise of state-directed capitalism through increased regulation, rapid technological changes, shifting demographics, and changing social/customer expectations are creating challenges and opportunities for banks. Banks must develop a clear strategy to address priorities like enhancing their customer focus, optimizing distribution, simplifying operations, gaining an information advantage, enabling innovation, and proactively managing risks to succeed in the changing landscape.
Banca Retail 2020 - PwC Informes - Informe completoPwC España
El informe ‘La Banca Retail en 2020, ¿Evolución o revolución?’, elaborado por PwC a partir de entrevistas realizadas a 560 directivos de las principales entidades financieras de 17 países diferentes, recoge los cambios que marcarán el futuro del sector bancario, así como la hoja de ruta que deberían seguir las entidades para alcanzar una posición de liderazgo en 2020.
Etude PwC sur les banques de détail (2014)PwC France
http://pwc.to/Olb8pn
Selon l’étude de PwC "Retail Banking 2020: Evolution or revolution", plus de la moitié (55 %) des dirigeants de banques de détail considèrent que les prestataires de services financiers non classiques – comme les banques en ligne - constituent une menace pour les banques traditionnelles. Ce rapport, fruit d'une enquête conduite auprès de 560 dirigeants d'institutions financières majeures dans 17 pays, indique également que plus de la moitié d'entre eux (54 %) estiment que les grandes banques remporteront la mise en 2020. Les autres (46 %) considèrent que les banques plus petites gagneront des parts de marché grâce à une différenciation accrue.
PwC a identifié 6 facteurs de réussite pour les banques de détail en 2020.
World Retail Banking Report 2015 from Capgemini and EfmaCapgemini
The document provides an overview of the 2015 World Retail Banking Report, which analyzes customer experience levels and behaviors based on a survey of over 16,000 banking customers in 32 countries. The following key points are made:
1) The overall Customer Experience Index (CEI) for retail banks stagnated at 72.7 in 2015, down slightly from 2014, indicating banks' efforts to improve customer experience are falling short.
2) While most regions saw an increase in positive customer experiences, Western Europe saw a significant rise in negative experiences, with the percentage of unhappy customers doubling from 2014.
3) Younger generations (Gen Y) reported lower customer satisfaction levels across all regions compared to older customers,
Asia's Digital Trade Landscape Heads into a New DecadeCognizant
This document discusses Asia's growing dominance in global trade and the opportunities and challenges it presents for banks. As Asian trade flows are expected to significantly outpace other regions, banks have an opportunity to better serve corporate clients' evolving financing needs through digital transformation. However, many banks still struggle to provide affordable financing to small and medium enterprises due to high compliance costs. Emerging technologies like blockchain and cloud-based platforms may help banks overcome these challenges if adopted as part of a future-proof architecture.
The document discusses potential market expansion and growth opportunities for ICICI Bank in emerging markets like India. It notes that ICICI Bank has opportunities in rural areas of tier 1, 2, and 3 cities that still rely on traditional banking. ICICI Bank is well positioned to capitalize on this due to its innovative services like electronic branches, tablet banking, and customer service solutions. The document also outlines ICICI Bank's past strategies around segmentation, targeting, positioning, product differentiation, and distribution that have made it a leader in retail banking in India.
Asia Digital Banking Penetration - Market research Thành Công
The document discusses digital banking trends in Southeast Asia, with a focus on Singapore, Malaysia, Indonesia, Thailand, and the Philippines. It finds that Singapore banks are the most advanced in digital initiatives, followed by Malaysian banks. Indonesian banks are seen as having huge potential for digital banking given regulations supporting branchless banking. Smaller banks in countries like Indonesia, Thailand, and the Philippines are currently the least prepared for digital disruption.
Towards the Digital Age of Retail Banking and the Omnichannel ConsumerIQads
This document provides a summary of a whitepaper report on the digital transformation of the retail banking industry in Romania. The 3-chapter report includes analysis of macroeconomic trends, an overview of the Romanian banking market, and results from public opinion surveys. It discusses key digitalization trends in banking, including simplicity, integrating services, and tailored experiences. Charts show most Romanians use internet banking for balances and payments, and opinions on saving habits and the role of cash versus cards. The document aims to help professionals understand the future of retail banking and digitalization.
Cash is still dominant in Japan, accounting for over 80% of transactions in 2014. However, card usage is growing, reaching 16% of payments that year. The largest card network in Japan, JCB, is looking to expand internationally to drive business growth, as the transition to digital payments is slow domestically. JCB has partnered with banks in countries like Russia, Myanmar, and Mongolia to begin issuing co-branded cards. This international expansion helps offset the current dominance of cash in Japan.
This document summarizes trends in the Australian banking market focused on Generation Y (Gen Y). It finds that Gen Y is more digitally engaged than older generations, with over half using mobile banking weekly. Gen Y is also more likely to apply for banking products digitally and to switch their main bank. As Gen Y grows in economic influence, their preferences for digital-only banking could undermine traditional branch-based models and provide opportunities for new digital-focused entrants. Established banks may need to adapt to remain competitive as Gen Y expects lower fees, better rates and a more digital-first experience.
India's fintech sector is growing rapidly, fueled by a large market base, innovation, and supportive government policies. Several startups offer fintech services like peer-to-peer lending, payments, remittances, and personal finance management. Both traditional banks and new fintech companies are disrupting the financial sector by using technology to improve access and efficiency of financial services. While fintech startups face challenges in scaling up, the large untapped market and supportive regulations provide opportunities for expansion. Collaboration between fintech and traditional banks also has potential to foster innovation and inclusion.
The Banking-as-a-Service 2.0 report is an in-depth analysis of the fast-evolving BaaS segment. In this report, we analyze the global landscape of specialized FinTech companies and banks that have BaaS as core to their business, funding and investment patterns since 2018, regulatory & market drivers, and a host of industry expert opinions.
1) ANZ embarked on a strategic transformation 5 years ago to become a "super regional bank" with a focus on the Asia Pacific region, as growth opportunities shifted to Asia.
2) Under this strategy, ANZ has significantly invested in expanding its presence in key Asian markets like China, Indonesia, Vietnam, and India.
3) ANZ's managing director of retail banking stresses that the retail business is critical to implementing the regional strategy, as it provides deposits, liquidity, and brand connectivity to customers across markets.
This document discusses the transformation of the global payments landscape from 2020 onwards. It predicts that payments will be fundamentally reshaped by technology, changing customer expectations, globalization, and regulation. Payments providers will need to view payments strategically and offer value-added solutions linked to broader commercial activities to remain competitive against new entrants like technology companies. The payments market is already transforming through the growth of alternative payments methods, particularly in developing regions. By 2020, the world of payments is expected to be virtually unrecognizable from today.
Digital challenger banks are simplifying the financial world, creating a customer centric approach to services, and transforming the way banking is viewed by the public and the market
Kakao Bank - Trailblazing Neobank from South KoreaSam Ghosh
Kakao Bank was launched in the year 2017 as part of the Kakao Corp. Within 24 hours, Kakao Bank enrolled 300K subscribers, 2 million in 15 days. As of the end of 2020, this South Korean Bank had more than 13 million users, around a quarter of the South Korean population. The bank has reached a loan book size of 20.3 trillion KRW (US$17.94 billion). The operating income for the bank stood at 804 billion KRW (~US$708 million) with 113.6 billion KRW (~US$100 million) net profit in FY2020.
Just after 3 years of its launched Kakao Bank is already planning IPO and is valued at around 10 trillion won (US$9.15 billion).
Let us learn about Kakao Bank.
FinTech's innovation in the financial sector means financial technologies that are linked to the spirit of an era. FinTech's aspirations have a mainstream line that can be found on any continent, such as services related to basic banking processes, such as one touch or mobile purchases. At the same time, there are services that are only linked to continents, such as African SMS payment or the Asian micro payment system. In this study, we want to present Asian fintech efforts, such as Taobao, Tmall, Jingdong or Yu'e Bao, with no transaction costs, zero entry barriers, and broad support. The main issue with continental fintech processes is that there is only a demographic reason for different services or more?! It is also a question of building a fintech service from top to bottom (Alibaba) in Asia, or can it be built from bottom to top (Yu’e Bao)?
The document summarizes key findings from the World Payments Report 2014 regarding global non-cash payment markets and trends. It finds that while global non-cash transaction growth rates slowed in 2012 compared to 2011, growth is expected to have accelerated in 2013. Growth continues to be driven by debit and credit cards, though at a slower pace. Developing markets are establishing initiatives to boost non-cash volumes and some countries may surpass North America and Europe in non-cash transactions over the next five years. Hidden payments are also growing as payments move away from regulated banking, though data on these markets remains limited.
A paradigm shift in the modus operandi of commerce across the globe has been significantly influenced by the payment card industry with brisk strides in digital technology. The blooming payment card industry has escorted the prosperity in economic growth of most of the countries. Besides, there exists a divergent level in subsuming card payment by different countries due to distinct social, economic and cultural background. In India, excessive use cash payments are due to offbeat business models and varied distinction in literacy levels. This paper aims to analyse outstanding payment cards in India by examining the number of cards in operation and the value of transaction in the past decade. Data from RBI source is collected to analyse for a period of eight years (2011-2019). The research finds that credit card penetration has increased by threefold with average growth of 15% YoY and debit cards increased by more than threefold with average growth of 19% YoY during the period of analysis. Yet, asymmetry between debit cards holders and credit card holders exists in India indicating credit card is still niche product. This provides platform for the payment card industry to unleash the potential to tap market in India.
This document provides an overview of financial technology (fintech) in India. It notes that India has a large population that is young, mobile, and growing rapidly. The fintech market in India is poised for significant growth, especially in digital payments via mobile devices. Mobile banking and digital payment solutions have potential to better serve small businesses and help move India towards a more cashless society. The document outlines several trends in Indian fintech including growing smartphone and internet usage, and opportunities in areas like lending, payments, remittance, and banking technology.
Future of Financial Services - Banking on Innovation - Final PaperJohn Fearn
This document discusses the political barriers to innovative financial services. It argues that while radical change in any sector poses challenges for politicians and regulators, the pace of financial innovation is leaving policymakers behind. It analyzes the political reputations of alternative finance providers, payments services, and high street banks to identify the challenges these firms face in influencing regulation. The document predicts that in the near future, most transactions will be digital, mobile payments will increase, and banking services will fragment across new providers, with 20% of lending from alternative sources. It argues that widespread mobile adoption and the 2007-2009 financial crisis have enabled this radical change by shifting consumer habits and eroding trust in large banks.
201404 Retail-Banking-2020-Evolution-or-Revolution by PwCFrancisco Calzado
Powerful forces are reshaping the banking industry towards 2020. Global macro-trends like the rise of state-directed capitalism through increased regulation, rapid technological changes, shifting demographics, and changing social/customer expectations are creating challenges and opportunities for banks. Banks must develop a clear strategy to address priorities like enhancing their customer focus, optimizing distribution, simplifying operations, gaining an information advantage, enabling innovation, and proactively managing risks to succeed in the changing landscape.
Banca Retail 2020 - PwC Informes - Informe completoPwC España
El informe ‘La Banca Retail en 2020, ¿Evolución o revolución?’, elaborado por PwC a partir de entrevistas realizadas a 560 directivos de las principales entidades financieras de 17 países diferentes, recoge los cambios que marcarán el futuro del sector bancario, así como la hoja de ruta que deberían seguir las entidades para alcanzar una posición de liderazgo en 2020.
Etude PwC sur les banques de détail (2014)PwC France
http://pwc.to/Olb8pn
Selon l’étude de PwC "Retail Banking 2020: Evolution or revolution", plus de la moitié (55 %) des dirigeants de banques de détail considèrent que les prestataires de services financiers non classiques – comme les banques en ligne - constituent une menace pour les banques traditionnelles. Ce rapport, fruit d'une enquête conduite auprès de 560 dirigeants d'institutions financières majeures dans 17 pays, indique également que plus de la moitié d'entre eux (54 %) estiment que les grandes banques remporteront la mise en 2020. Les autres (46 %) considèrent que les banques plus petites gagneront des parts de marché grâce à une différenciation accrue.
PwC a identifié 6 facteurs de réussite pour les banques de détail en 2020.
World Retail Banking Report 2015 from Capgemini and EfmaCapgemini
The document provides an overview of the 2015 World Retail Banking Report, which analyzes customer experience levels and behaviors based on a survey of over 16,000 banking customers in 32 countries. The following key points are made:
1) The overall Customer Experience Index (CEI) for retail banks stagnated at 72.7 in 2015, down slightly from 2014, indicating banks' efforts to improve customer experience are falling short.
2) While most regions saw an increase in positive customer experiences, Western Europe saw a significant rise in negative experiences, with the percentage of unhappy customers doubling from 2014.
3) Younger generations (Gen Y) reported lower customer satisfaction levels across all regions compared to older customers,
Asia's Digital Trade Landscape Heads into a New DecadeCognizant
This document discusses Asia's growing dominance in global trade and the opportunities and challenges it presents for banks. As Asian trade flows are expected to significantly outpace other regions, banks have an opportunity to better serve corporate clients' evolving financing needs through digital transformation. However, many banks still struggle to provide affordable financing to small and medium enterprises due to high compliance costs. Emerging technologies like blockchain and cloud-based platforms may help banks overcome these challenges if adopted as part of a future-proof architecture.
The document discusses potential market expansion and growth opportunities for ICICI Bank in emerging markets like India. It notes that ICICI Bank has opportunities in rural areas of tier 1, 2, and 3 cities that still rely on traditional banking. ICICI Bank is well positioned to capitalize on this due to its innovative services like electronic branches, tablet banking, and customer service solutions. The document also outlines ICICI Bank's past strategies around segmentation, targeting, positioning, product differentiation, and distribution that have made it a leader in retail banking in India.
Asia Digital Banking Penetration - Market research Thành Công
The document discusses digital banking trends in Southeast Asia, with a focus on Singapore, Malaysia, Indonesia, Thailand, and the Philippines. It finds that Singapore banks are the most advanced in digital initiatives, followed by Malaysian banks. Indonesian banks are seen as having huge potential for digital banking given regulations supporting branchless banking. Smaller banks in countries like Indonesia, Thailand, and the Philippines are currently the least prepared for digital disruption.
DBS Bank Insight - Digital Banking Asean BanksSan Naing
The document discusses the state of digital banking in Southeast Asia. It finds that Singapore banks are the most advanced in digital initiatives, followed by Malaysian banks. Indonesian banks have huge potential for growth in digital banking due to regulations supporting branchless banking and the country's demographics. Smaller banks in countries like Indonesia, Thailand, and the Philippines currently lag behind in digital capabilities. The document emphasizes that investing in digitization will be important for banks to gain efficiencies and remain competitive against new digital disruptors.
The document discusses the rise of digital banking and the threat it poses to traditional banks. It notes that fintech investments have doubled in recent years and there are now 19 fintech "unicorns" valued over $1 billion globally. Fintech firms have made inroads in areas like lending, payments and wealth management. The document examines how banks can respond, including by digitizing their own services to lower costs and improve the customer experience, or adopting a more holistic "customer ecosystem" approach to integrate banking into customers' daily lives. It also discusses how smaller banks can collaborate with fintech firms to help scale their operations and better compete with larger incumbents.
Social network & Digital Payment in China 2017Dao Phuong Nam
The rapid growth of social networks and e-commerce
platforms has transformed the way people communicate
and transact around the world. Integrating digital payments
into these growing networks and platforms has presented
vast opportunities to drive economic opportunity, financial
inclusion, transparency, security, and growth. In practically
all countries individuals, businesses, and policymakers are
recognizing these opportunities and acting on them, but
perhaps nowhere more so than in China.
This report examines two of China’s most far-reaching
applications – WeChat and Alipay – and explores their
role in the development of one of the world’s largest and
most sophisticated digital payments ecosystems. The
report illustrates how incorporating digital payments
into existing services has unlocked economic opportunities
for hundreds of millions of users, including through
low-risk savings accounts, new credit assessment and
lending services, and by opening up new markets for
micro, small, and medium enterprises
The global volume of non-cash payments continued growing in 2010 and 2011, with developing markets seeing the fastest growth. Cards remain the largest payment method globally, and their use is increasing for smaller purchases. While developed markets still account for most payments volumes, developing economies like Brazil, China, and Russia are among the top ten markets and seeing volumes jump over 30% annually. Electronic and mobile payments are also growing rapidly and central banks need better data on these emerging channels.
e-Conomy SEA 2019 report (from Google and Temasek)Duy Hoang
The Internet economy in Southeast Asia has grown rapidly in recent years, surpassing $100 billion in gross merchandise value for the first time in 2019. This represents a nearly 40% increase from 2018 and more than triple the size in 2015. Powered by increasing mobile internet adoption and changing consumer behavior, sectors like e-commerce and ride hailing have seen especially strong growth, becoming integral parts of daily life for many in the region. If growth continues at its current pace, the Internet economy is projected to reach $300 billion by 2025.
Reference
e-Conomy SEA is a multi-year research program launched by Google and Temasek in 2016. Bain & Company joined the program as lead research partner in 2019. The research leverages Bain analysis, Google Trends, Temasek research, industry sources and expert interviews to shed light on the Internet economy in Southeast Asia. The information included in this report is sourced as “Google & Temasek / Bain, e-Conomy SEA 2019” except from third parties specified otherwise.
Disclaimer
The information in this report is provided on an “as is” basis. This document was produced by and the opinions expressed are those of Google, Temasek, Bain and other third parties involved as of the date of writing and are subject to change. It has been prepared solely for information purposes over a limited time period to provide a perspective on the market. Projected market and financial information, analyses and conclusions contained herein should not be construed as definitive forecasts or guarantees of future performance or results. Google, Temasek, Bain or any of their affiliates or any third party involved makes no representation or warranty, either expressed or implied, as to the accuracy or completeness of the
information in the report and shall not be liable for any loss arising from the use hereof. Google does not provide market analysis or financial projections. Google internal data was not used in the development of this report.
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4. I. The rebalancing of East and West
It wasn’t so long ago that banks in Asia1
looked to
the West as they developed products, services,
and business models. The relationship between
East and West is changing rapidly, however, as the
emerging markets of Asia have become a major
engine of growth in global banking. More than
40 of the world’s 100 largest banks by assets are
Asian and account for approximately 50 percent
of the market capitalization of the top 100 banks
globally. Asia has been the world’s largest regional
banking market for a decade, generating pre-tax
profits in excess of $700 billion and accounting for
37 percent of global banking profit pools in 2018
(Exhibit 1). We estimate that as incomes continue
to rise and the middle class grows to include two-
thirds of Asian households, personal financial
assets in the region will total $69 trillion by 2025,
representing approximately three-quarters of the
global total.
1
Including Australia and excluding the Middle East
2
McKinsey Global Payments Map. Digital payments include all transactions (cards, bank transfers, digital wallets) initiated by retail
customers through digital channels (phone, tablet, or computer).
Not only have Asian banks caught up and
begun to surpass their Western peers in scale,
but consumers’ tech-savviness has created
opportunities for banks to deliver new innovations
and leap ahead. Asia’s best-known fintech
innovators, including Alipay and WeChat Pay, lead
the world in scaling digital payments. According
to McKinsey’s Global Payments Map, digital
payments in China account for approximately 99
percent of the country’s non‑cash transaction
volume and 45 percent of digital payments
worldwide.2
Across Asia, incumbent banks are partnering with
fintech start-ups to promote digital payments. In
Thailand, Kasikornbank and Grab have teamed
up to launch GrabPay by KBank, a mobile wallet.
BRI (Bank Rakyat Indonesia) has partnered
with Alipay to expand point-of-sale acceptance
of mobile payments for Chinese tourists
visiting Indonesia.
The West has led much of the development of the world’s modern
banking industry across all dimensions – from size, to growth, to
business models, and innovation. In recent years, however, Asia has
tilted the scale, delivering game-changing growth and innovations in
banking services. This reflects not only the increasingly central role of
diverse Asian economies in global trade and economic growth, but also
Asia’s renewed leadership in scaling innovative technologies and new
business models. Now, as the pace of growth slows, Asia’s banks face
serious challenges and must reinvent themselves to survive. This paper,
in which we summarize the current status of Asia’s banking industry
and outline one possible plan of action by which banks may reinvent
themselves for the digital age, is part of McKinsey’s Future of Asia
research program.
1 Reinventing for the digital age
5. Asia has also proven to be fertile ground for the
development of digital banking, with numerous
companies making the transition from technology
platform to digital bank. In China, Tencent’s
WeChat offers loans through WeBank; in South
Korea, Kakao Talk launched a digital bank – Kakao
Bank – in 2017; and the Japanese e-commerce
group Rakuten has expanded into credit cards,
digital banking, investments, and insurance. Not
to be outdone by fintech disruptors, traditional
banks have launched stand-alone digital banks,
(e.g., The State Bank of India’s YONO, BTPN’s
Jenius in Indonesia, and DBS digibank in India and
Indonesia) as a way to reach new markets and to
acquire new customers at lower cost.
The rise of ecosystems as a new way of organizing
economic activity is another area where Asia is
leading. For example, a diversified ecosystem
for trade, including banking and payments, has
emerged from Alibaba’s platforms for B2B and
B2C commerce. Ping An, one of China’s largest
financial conglomerates, has reinvented itself as a
“tech + fin” ecosystem company, providing loans
and investments, as well as insurance, across
platforms for healthcare, housing, and more.
Banks in diverse markets are also building digital
platforms as a way to integrate financial services
into the everyday activities of consumers and small
and medium-size enterprises (SMEs), e.g., HDFC
Bank has broadened services for small farmers
in India; DBS Marketplace enables consumers to
search for cars, auto loans, and more in Singapore.
Exhibit 1
Asia has been the largest regional banking market for more than ten years.
0
1,000
2,000
Profit before tax,¹ fixed 2018 exchange rate,
$ billion
Profit before tax,¹ fixed 2018 exchange rate,
%
Compound annual growth rate,
%
1
Total pretax profit pools of all customer-driven banking activities, including retail and institutional management.
²Includes Eastern and Western Europe.
Source: Global Banking Pools, from Panorama by McKinsey
0
20
40
60
80
100
2007 2018 2007 2018
Asia
Global
North
America
Europe²
Latin
America
Middle
East
Africa
6
–13
2007–10
–22
–32
10
–11
11
12
15
2010–14
18
15
13
16
8
3
7
2014–18
7
19
14
1
3
2Reinventing for the digital age
6. While digitization and advanced data analytics
are creating important opportunities for Asian
banks, they also render long-standing business
models obsolete, as new entrants compete
aggressively to steal market share from
incumbents. What is more, Asia is facing a tougher
macroeconomic environment as growth slows,
asset quality declines, and uncertainty about the
macroeconomic outlook increases. The storm over
Asia is gaining force, and banks must act quickly to
counter attackers stealing market share.
II. Asia banking braces for
consolidation
For most of the past decade, Asia banking has
been the darling of the world, but this is no longer
the case, as the industry converges with global
averages on margins, returns on equity (ROE),
and price-to-book (P/B) multiples. And things are
likely to get worse for Asia’s banks before they get
better.
Banking industry revenue growth in Asia has
slowed from double digits in the early years of the
decade to five percent per annum for the period
from 2014 to 2018. And while Asia today accounts
for more than a third of global banking profit pools,
this has shrunk from nearly half in 2010, as banks
in developed markets have recovered from the
global financial crisis . Margins are also thinning,
as banks in both emerging and developed markets
contend with fierce competition from digital
attackers and peer banks. Average banking ROE
for Asia decreased from 12.4 percent in 2010 to
10.1 percent in 2018. In emerging markets, rising
capital costs and declining asset quality have also
taken their bite out of returns, pushing the average
ROE down from 19.5 in 2010 to 11.4 percent
in 2018, converging with the global average.
Investors have shown strong support for the
region’s fintech and big tech disruptors, but their
outlook for Asia’s traditional banks is, on balance,
pessimistic, pushing P/B ratios for Asia banking
down from 1.4 in 2010 to 0.7 in 2018 – trailing the
global average of 0.9 (Exhibit 2).
Not only have growth in revenues and profit
slowed and returns weakened for Asia banking,
but rising headwinds pose significant challenges
for banks at the dawn of the new decade. If, as
forecasts suggest, GDP growth continues to
lose steam across emerging Asia, banks will be
challenged to find new avenues of growth and
will likely have to deal with deteriorating asset
Exhibit 2
Banks’ price-to-book multiples have declined, reflecting investors’ negative expectations.
Price-to-book multiples¹
¹Based on a sample of 2,000 listed banks across markets. Book value does not exclude goodwill as the data are available only for ~60% of covered banks.
Source: SNL Banker; Global Banking Pools, from Panorama by McKinsey
2.5
0.5
0.0
1.0
1.5
2.0
2007 2018
2.3
1.1 1.1
1.7
1.1
0.9
1.1
Global 0.9
Asia 0.7
1.0
3 Reinventing for the digital age
7. quality and rising risk cost. Already in 2018, risk
cost provisions for Asia rose to approximately
0.30 percent, the highest level of loan losses for
the region since 2002. Slower GDP growth in
China – compounded by ongoing trade friction
with the US and the rapid increase in real estate
prices relative to household income – could weigh
heavily on the country’s trading partners, as the
effect of a correction could potentially destabilize
banks in neighboring markets.
In addition to these headwinds, open banking
is taking hold, with diverse markets moving
toward broader participation in the banking
system. India, for example, allows non-bank
service providers direct access to the United
Payments Interface; Hong Kong and Singapore
have recently introduced new procedures for
licensing digital-only banks. Australia and
Singapore – among others – have adopted open
banking rules requiring banks to allow qualified
third-party service providers to link to banking
systems to access account information and initiate
transactions on behalf of customers. We expect
that as regulators consider ways to promote lower
costs and better products for consumers, as well
as improved system efficiencies and controls,
open banking will likely become the norm in most
Asian markets.
This will undoubtedly increase pressure on the
margins and market share of incumbent banks
as they go to battle with fintech attackers over
payments, lending, and investments. Scale plays
a bigger role in this challenging environment, with
positive implications for margins, cost efficiency,
and productivity, and open banking could prove
a boon to forward-looking banks that can
leverage their scale and core assets – customer
relationships, data reserves, and proven expertise
in risk management – to deliver better products,
services, and pricing.
Most banks, however, will be challenged to
increase their returns adequately to win investors
over and execute the transformation required to
remain competitive. Well-capitalized institutions
generating market-leading returns will likely seek
to cement their advantage by acquiring smaller
(less-well-capitalized) organizations to increase
scale inorganically. Weighing these dynamics,
Asia’s banks are bracing for consolidation.
III. Reinventing for the future
Just as iron sharpens iron, we believe that the
region’s banking industry will emerge stronger and
leaner than ever. To remain relevant, however, each
bank must reinvent itself – a difficult task requiring
strong commitment. At the same time, banks
must balance short-term goals – in particular
strengthening the core and capturing pockets of
growth – with priorities for the long term – e.g.,
articulating anew the bank’s purpose for the
digital age, redefining its value proposition, and
rebuilding the operating model.
Increasingly, banks will both acquire new customers
and interact with ongoing customers through digital
ecosystems, requiring new approaches to branding
and relationship management as well as changes
in business model and technology architecture.
Top performers must remain vigilant and maintain
their lead in products, customer base, and returns
by augmenting their data assets and analytical
capabilities. Organizations that generate returns
below the average cost of capital – approximately
two-thirds of Asian banks – will face an existential
choice: Either reinvent to stay relevant or lag behind
and eventually disappear. Banks must “disrupt
themselves,” shifting from old to new models and
ways of working, all while increasing revenue and
extending market share.
Asia’s banking leaders have already taken
decisive steps to strengthen the core, focusing on
productivity, risk, and capital optimization. Many
have reduced operating costs by 30-40 percent
across sales and service, support functions,
and back-office operations through extensive
digitization. The full potential of this opportunity
lies in adopting zero-based budgeting to transform
mindsets and redesign processes to achieve
radical gains in productivity. For risk management,
banks are finding that they can reduce loan
losses while allowing a broader population to
qualify for loans by developing machine learning
algorithms to analyze a combination of traditional
underwriting data and unstructured data from
internal and external sources. Capital allocation
is another area where banks can leverage new
strengths in data analytics to reduce waste. For
example, some banks are able to allocate capital
consumption to the level of products and individual
accounts, which in turn leads to highly accurate
risk weightings at the portfolio level. As a result,
these banks have been able to free up between
10 and 20 percent of capital.
4Reinventing for the digital age
8. To achieve such radical improvements in
performance, banks must leverage all the new
tools, technologies, and capabilities available
today, including digitization, advanced data
analytics, robotics, and AI. Banks can deploy these
same capabilities in pursuit of strategic growth,
focusing on four fast-growing businesses: wealth
management, consumer and SME lending, and
transaction banking. Together, these businesses
hold the potential for US $100 billion in new
revenue for Asia’s banks each year.
In wealth management, the key is to strike the
right balance between self-guided digital tools
and high-touch consultation. Within high- and
ultra-high-net-worth segments, this means
delivering portfolio offerings tailored to individual
client needs. Use of voice recognition and AI can
support a high degree of personalization at scale
for the mass affluent segment. Consumer and
SME lending are also poised for strong growth.
Retail lending in Asia, which totaled $12.8 trillion
in 2018, is on track to reach $21.2 trillion in 2025
(Exhibit 3). The loan book for SMEs – already
bigger than retail and corporate lending – is
expected to grow nine percent each year, totaling
$23 trillion in 2025. Banks can use this strong
growth as a foundation for developing new value
propositions and multiplying revenue streams.
In the consumer lending market, regulators in
several countries are wary of mounting consumer
debt levels, and banks should use sophisticated
risk models to identify the most qualified
customers within segments where product
penetration is low relative to GDP. Similarly, by
combining traditional and non-traditional data,
leading banks and fintech attackers have built
risk-scoring engines to speed up loan approvals
for SME customers, even those with limited or no
credit history. One example is HDFC’s “Milk-to-
Money” program in India, which tracks regular
ATM deposits to establish a credit profile for dairy
farmers, many of whom have only recently opened
bank accounts.
Exhibit 3
Asia’s banks can leverage strong growth in retail and in small and medium-size enterprise
lending as the foundation for innovation and reinvention.
Asia–Pacific 2018 banking loan balance,
fixed 2018 exchange rate, $ trillion
Asia–Pacific 2018 banking loan balance,
fixed 2018 exchange rate, %
Compound annual growth rate,
%
1
Estimated.
Source: Global Banking Pools, from Panorama by McKinsey
0
20
40
60
80
100
2010 2014 2018 2022¹ 2025¹ 2010 2014 2018 2022¹ 2025¹
Retail
Large
corporations
Small and
medium-size
enterprises
8.0
2010–18
8.3
8.7
8.0
2018–25¹
4.2
9.1
0
20
40
60
80
5 Reinventing for the digital age
9. Finally, transaction banking, which already
accounts for approximately a third of all banking
revenues in Asia and captures more than half
of transaction banking revenues globally, holds
significant potential for further growth. Banks can
potentially increase transaction banking revenue by
10-20 percent across four main business lines: cash
management, trade services, securities, and cross-
border flows. Competition is fierce and margins
are thin, making it crucial for banks to combine
scale with sophisticated analytics capabilities to
eliminate waste, create new products, and deepen
relationships. While it is often assumed that demand
for a superior digital experience is higher among
retail banking customers, corporate and SME
customers expect an equally high level of seamless
integration and ease of use. In response, leading
banks are using APIs to integrate banking functions
more deeply within corporate systems, enabling
them to provide a dashboard view, for example, of
intraday cash position across multiple currencies,
investments, working capital, and payables. What
is more, advanced data analytical models are
helping banks enhance their liquidity management
services, optimize netting arrangements for on-us
transactions, and implement dynamic pricing.
In order to succeed in this broad effort to
strengthen the core, build new business models,
and increase revenue, banks will need to deploy
cutting-edge tools, technologies, and capabilities.
Succeeding in this requires both new thinking
about and reinvention of the way banks operate
across four pillars: technology architecture;
advanced analytics; talent management; and
partnerships, mergers, and acquisitions.
Flexible technology architecture: To compete
with big tech companies on speed, productivity, and
customer experience requires modular platforms,
which allow developers continuous integration
and interoperability with core systems. While core
systems may be transformed gradually, the modular
applications or microservices supporting specific
use cases can be updated frequently as the market
changes and new innovations become available.
Beyond architectural and system changes, banks
should also learn to adopt new ways of working. This
requires not only flexibility in acquiring, upskilling,
and integrating new talent profiles, but also shifting
to a new operating model and culture in which
3
“Skill shift: Automation and the future of the workforce,” McKinsey Global Institute, McKinsey.com, May 2018.
4
“How Maybank is creating a people-centric workplace of the future,” Human Resources, February 25, 2019
https://www.humanresourcesonline.net/how-maybank-is-creating-a-people-centric-workplace-of-the-future/
business and technology competencies are more
closely intertwined.
Advanceddataanalytics:Advanced data analytics
form the cornerstone of superior customer
experience, and many banks now focus on data as
a core enterprise asset. This entails the articulation
of an enterprise-wide data strategy and investment
roadmap so that data-and-analytics projects can
be tightly linked to value creation. Banks should
focus first on advanced analytics use cases with the
greatest impact on customer experience and value
to the bank. Commonwealth Bank of Australia (CBA),
for example, has built a customer engagement
engine that analyzes more than 30 billion data
points to generate upwards of 40 million offers each
month. Developing a top-notch data-and-analytics
program requires vision and commitment, and to
earn a good return on the investment, it is crucial
to give employees the tools and skills they need
to formulate their own data queries for strategic
planning and day-to-day management of strategic
goals. This requires a combination of strong
governance and autonomy to enable individuals
across the entire organization – from sales and
service to risk management and digital innovation –
to excel in a data-driven environment.
Talent management: With automation expected
to disrupt up to 40 percent of all banking activity
and affecting half of banking jobs by 2030,3
banks are today evaluating how to combine
recruiting, reskilling, and redeployment to build
the workforce of the future. Malaysia’s Maybank
(Malayan Banking Berhad) has launched a learning
program to help employees acquire relevant skills
for the next phase of their careers, with sessions
on coding, algorithm programming, artificial
intelligence, and machine learning.4
Aiming to
enhance their appeal to millennials with superior
digital skills, many banks are building a reputation
for leadership in technological innovation, forging
ties with fintech and academic communities, and
developing a culture where talented and ambitious
employees know they can make a difference. It
is critical to understand the shifts required in the
bank’s composite talent profile, and to succeed in
this transition, top leaders must commit not only to
recruiting new talent but also to helping existing
employees acquire the skills needed to thrive in
the new culture.
6Reinventing for the digital age
10. Partnerships, mergers, and acquisitions: In this
age of open banking and digital ecosystems, many
banks are finding that partnerships are critical to
success in extending their footprint, delivering
superior products, and gaining access both to new
customers and to new types of data (Exhibit 4).
As an example, three of Australia’s big four banks
– ANZ, NAB, and Westpac – have invested in Data
Republic, a data hub through which organizations
can store, exchange, and collaborate on
aggregated data projects in a secure environment.
In Thailand, Siam Commercial Bank and Julius
Baer have partnered to deliver global investment
opportunities to customers. In Indonesia, Bank
Central Asia (BCA) has linked with leading
e-commerce sites, enabling the bank to expand
its lending business while keeping risk costs low.
And in Singapore, OCBC Bank (Oversea-Chinese
Banking Corporation) offers home mortgages
through the personal finance portal MoneySmart.
Mergers and acquisitions (M&A) are another
way to acquire crucial capabilities and extend
market reach. DBS, for example, has acquired
ANZ operations in five countries. Kotak Bank
has extended its footprint into southern India
by acquiring ING Vysya and entered the lower
end of the market with its acquisition of BSS
Microfinance. Given the importance of scale in
achieving higher returns – and, consequently,
higher valuations – carefully executed mergers
and acquisitions offer an attractive option for
increasing market share and consolidating scale,
capabilities, and talent. If they have not done so
already, now is the time for banks to establish
a dedicated group responsible for planning
and managing M&A, as well as partnerships.
Banks should remember that 90 percent of the
value of a merger is realized within the first two
years and establish early on a plan for post-
merger integration to ensure that synergies are
realized promptly.
The world is rebalancing, giving rise to challenges
and opportunities that are pushing Asian banks to
embark on a path of radical transformation. The
way forward, however, is fraught with existential
challenges for every banking organization, bank
and non-bank, incumbent and new entrant:
Asia’s banks must reinvent themselves or risk
disappearing. In order to maintain their status
as pre-eminent providers of financial services,
banks need to develop best-in-class digital-and-
analytics capabilities and achieve new levels
of productivity through greater scale, market-
leading cost-efficiency, and data-driven models
to increase revenue across the franchise, focusing
especially on wealth management, retail and SME
lending, and transaction banking.
In addition to new business models, banks must
define anew their sense of purpose. As stewards
of the system of financial intermediation, banks
are vital to society. In the years following the
global financial crisis, however, many banks
seem to have lost their sense of purpose and the
perception of the industry has not fully recovered.
As they reinvent themselves for the digital age,
banks must also be clear about their “why,”
emphasizing their role as responsible stewards in
promoting sustainable growth and building for a
stronger tomorrow.
Exhibit 4
Partnerships and M&A are effective ways to
extend market reach, achieve scale, and consolidate
capabilities.
Partnerships
and M&A
Enhance scalability
and access new
technology
Retain customers
and offer third-
party services
Improve efficiency
and decrease
operating cost
Redefine customer
experience/
new services
Boost growth and exposure
to new opportunities
Increase
customer base
7 Reinventing for the digital age