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Like all industries, the Financial Services sector has grappled with uncertainty as the world forges a path through the COVID-19 pandemic. However, a year on from initial lockdowns and the shift to remote living and working, firms in Southeast Asia are finding clarity in terms of where to focus and what to prioritize. While the levels of readiness- and therefore response- to a crisis of this magnitude varied by market, firms across the region are now largely moving in similar directions with a particular focus on digital financial services.


Leaders in the financial services industry are building modular platform capabilities to offer highly personalized experience to customers across digital touch points. They are focusing on leveraging data assets; creating collaborative ecosystems; and building robust operating models to ensure resilience and adaptability to market shifts.


The opportunity for Financial Services is huge. Southeast Asia is one the fastest growing regions with a GDP expected to reach $5 trillion in the next five years. This decade could mark a tectonic shift in digital Financial Services for South East Asia, and there will be both challenges and opportunities along the way.

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Southeast Asia: SWOT Analysis

  • Increased access to customer data: Creation of hyper-personalised offerings
  • Innovation in digital payments and remittances: Simplification of financial services
  • Well-established and trusting customer relationships: Enable cross-selling and retention
  • Scale underpinned by strong balance sheets: Key differentiator for corporate banking clients
  • Low interest rates hurt profitability: Sluggish economic growth with low interest rates
  • Expected credit losses due to the pandemic
  • Changing talent demands: Need for multi-disciplinary teams with technology, creative  and financial expertise that can collaborate to modernize the business
  • Increased mobile usage and penetration: Helping embedded finance
  • Two thirds of the population either unbanked or underbanked
  • Favorable regulator: Enabling digital acceleration
  • Large untapped SME segment: Needs access to credit and other products
  • Emerging technology capabilities: Accelerating reimagined customer experience
  • Collaboration with disruptors: Delivering enhanced digital services
  • Greater liquidity and transparency requirements: Demands of an evolving regulatory framework
  • New competition: Alternative finance, challenger banks, aggregators, and other non-bank financial institutions
  • Changing customer demand: Need to keep pace with rapid shifts in behavior and preference
  • Macro-economic and political factors: Need to keep pace with rapid shifts in behavior and preference

Country Highlights



  • Third largest banking industry in Asia and leading financial center and major distribution hub
  • Shadow banking, cybersecurity, and the rise of digital-only banks are changing the industry
  • COVID-19 has accelerated fintech adoption
  • Rapid adoption of emerging technologies to digitize banking processes


  • Digital lending and fintech adoption are driving tech investments
  • Commercial banks are focused on securing digital licenses, adoption of blockchain, facial recognition and AI to drive digital transformation
  • Lags behind other Asian countries in digital banking
  • Low profitability and increased NPLs resulting from the pandemic
  • CIOs are prioritizing digitalization to enhance customer experience


  • Key technology initiatives include digital banking transformation and increased fintech collaboration
  • Rise of robo-advisers and fintech startups in the wealth management sector
  • Connectivity and infrastructure issues remain a challenge
  • CIOs are prioritizing core banking transformation, digital strategy and platforms to enhance customer experience


  • Largest in Southeast Asia with more than 1,600 licensed commercial and rural banks
  • Growth in digital banking spurred by growth in e-commerce, enhanced security, expanding mobile payments market, and government initiatives
  • Important and fast growing market for foreign banks
  • CIOs are focusing on launching innovations across automation and open banking,microservice platforms, and modernizing legacy systems
The Rise of the Digital Financial Services Firm

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