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Asia-Pacific is currently the fastest-growing region in the world, entering its ‘Digital Decade’ driven by consumers embracing digital services as part of their everyday life, especially in the areas of e-commerce, digital financial services, and food delivery. Out of the 60 million consumers who adopted new digital services since the start of the pandemic, 9 in 10 said they will continue using them in the future. Merchants are also grabbing the opportunity of digital platforms which have been key to their survival during the pandemic.
At the end of 2020, 1.2 billion people across the Asia-Pacific were connected to the mobile internet, equivalent to a 42% penetration rate with 1.6 billion people subscribed to mobile services, making the region the most suitable candidate to accelerate the adoption of digitization and underscoring the need for more efficient digital banking solutions.
According to a McKinsey report, nearly nine in ten consumers across the emerging and developed markets of the Asia–Pacific region use digital banking actively. Given this, it’s no surprise that today's banking consumers ask for convenient real-time banking, more efficient digital tools to pay and manage their money, modern mobile co-op services, and more.
I have put together 5 key insights that the Banking sector requires, to understand the needs of their customers better.
- I wish for a debt-free life for my family with a fair sustainability/contingency fund/insurance/savings
- I wish to be self-capable of smart financial management decisions
- I wish I could get reliable financial management guidance/insights/recommendations
- I wish I can trust my bank that it’s acting in my best interest
- I wish for a delightful, time-relevant & customer-centric digital banking experience
The consumer’s state of mind is demonstrated very strongly in the first four points as they become clearer on their financial goals and life plans. We are all customers of a bank somewhere and rely on our Bank to provide us with the tools, guidance, and information to make the best financial decisions.
Trust is key to increasing customer loyalty, but most Asia Pacific bank consumers are not convinced that their banks are acting in their best interests; in fact, only 23 percent of Asia-Pacific consumers completely trust financial services firms in a time of crisis.
The adoption of digital banking amongst consumers in the emerging Asia Pacific region has increased from 54 percent in 2017 to 88 percent in 2021. However, most people are still dissatisfied with the digital banking experience through banks, including tools, personalized recommendations, user interfaces, and ease of use.
It’s not an easy journey for Asia Pacific banks to navigate their way through a region that is a melting pot of different levels of digital & financial literacy, and market differences making it difficult for banks to serve their customers in a unified way. Further, the financial services market is pressured by competition, regulatory changes, and the need to provide superior personalized customer experiences.
APAC is one of the wealthiest populations in the world and Banks in the Asia Pacific region need to have a clear digital-first strategy for customers’ financial success above anything else to seize this opportunity.
How can Banks optimize their digital strategies for customer centricity?
As branch activities decline and traditional banking is threatened by digital challengers, Banks need to find new ways to manage their customer’s finances and loyalty through omni-channel offerings.
This requires a platform approach that goes beyond mere transactions and empowering bank employees. It must build commitment across multiple channels and touchpoints, to provide personalized and tailored services, that include third-party integrations, all with the customers' needs and experiences in mind. For many Banks, the organization's technology strategy and legacy technologies are hampering digital initiatives.
Despite all these challenges, Banks are accelerating with their digital and transformation investments and improvements. Digital banking platforms are a key business initiative that fosters innovation, accelerates application development and time to market to meet the needs of customers, and helps banks stay ahead of the competition through a mobile-first and omni-channel experience.
The reinvention of the Bank’s digital models and channels will increase customer engagement, provide a stronger competitive position and increase overall revenue for the sector.
Choosing the right technology partner for your digital agenda
The pandemic continues to accelerate the demand for digital banks and increases the workload of many banking applications and systems that support customer-centric processes.
As consumers increasingly rely on online and mobile services, ensuring the availability and resiliency of banking applications and systems is more important than ever for the Banking sector. The platform Banks choose must be robust to meet the current and future needs of the organization, market, and customer.
Technology providers, such as Software Group, offer highly integrated, platform-based banking solutions that help financial institutions of all sizes, deal with outdated and expensive infrastructure and adapt quickly to the ever-changing needs of consumers. They provide Banks with an integrated digital platform to manage and deliver a full range of financial services omni-channel, helping them meet the growing demand for convenient, real-time banking services.
The right technology partner should:
- Support your strategy and add value where you need it most – which is determined by the needs and expectations of your customers and market.
- Discover global trends and use local knowledge and resources to develop effective world-class solutions.
- Help you expand your market and improve operational efficiency, open new revenue streams, enter new markets, stay competitive, transform, optimize, and grow.
In summary
The pace of digital change is relentless, consumer expectations are rising, digital challengers and neo-banks are not wasting time, all of this and more is shaping the future of the financial services industry. However, traditional banks can no longer afford not to act, within carefully considered digital strategies and objectives, such as:
Connect and integrate data and systems, strengthen data analysis capabilities, and leverage open banking APIs to better understand user needs.
- Provide personalized services to promote stickiness & loyalty.
- Provide transparent communication and ongoing financial education.
- Provide efficient and effective mobile & web applications.
- Optimize digital features to ensure seamless onboarding to ensure you engage customers at the start of their journey.
- Choose the right technology partners as the key to driving your digital agenda.
Sources:
Google, Temasek, Bain & Company, e-Conomy SEA 2021
Ernst & Young, Andrew Gilder, COVID-19: How Asia-Pacific banks can enhance long term trust, 2020
GSMA, The Mobile Economy Asia Pacific 2021
McKinsey, Emerging markets leap forward in digital banking innovation and adoption, 2021
