Redefining the Banking Experience: Innovation and Competition in Southeast Asia

In Southeast Asia, banks dominate the corporate landscape, accounting for over half of the region's major companies by market capitalisation. The region's dynamic and tech-savvy population epitomises a mobile-first generation, where the pervasive use of mobile devices has become an integral part of daily life. The adoption of mobile technology has become deeply ingrained in the fabric of society, transforming the way people communicate, access information, and engage with digital services. This mobile-first mindset has permeated various facets of daily activities, exerting a profound influence on the future of digital services, including banking. This trend has compelled traditional banks to make substantial investments in digital transformation, aiming to develop innovative platforms and products that enhance the customer experience. Incumbent banks in Southeast Asia face the dual challenge of meeting heightened expectations of trust from customers while navigating fierce competition from super apps like Grab and Goto, as well as challenger digital banks.

The future of banking in Southeast Asia hinges on how effectively traditional banks navigate the digital landscape and adapt to evolving customer expectations.?

As competition intensifies, incumbent financial institutions will need to successfully embrace innovation and deliver exceptional digital experiences to thrive in this dynamic and rapidly changing market. Understanding and catering to the unique demands of Southeast Asian consumers will be pivotal in securing a competitive advantage in this digital era.

According to results from the 2022/23 AIBP ASEAN Enterprise Innovation Survey, ASEAN financial institutions indicated that big data analytics (73%) is a technology that they are looking to invest in, followed by robotic process automation (52%), machine learning (50%), artificial intelligence (47%) and internet of things (24%).?

Throughout the past week, we were privileged to engage with and gain insights from the exceptional finalists of the esteemed 2023 AIBP ASEAN Enterprise Innovation Awards. This year marks the seventh edition of the awards, which have become a benchmark of excellence in recognising and celebrating innovation within ASEAN.?

The finalists of the 2023 AIBP ASEAN Enterprise Innovation Awards showcase a perfect blend of tradition and innovation, with long-standing pillars of the industry such as Bank of the Philippine Islands (BPI) (founded in 1851) and Hong Leong Financial Group (Hong Leong Bank founded in 1905) leading the way. These esteemed institutions exemplify a rich history of excellence. Joining them are finalists including Astra Financial , CIMB Niaga , Bank Aladin Syariah , RHB Banking Group , VPBank , MBBank , KASIKORN Business-Technology Group [KBTG] , and BIDV (Bank for Investment and Development of Vietnam) . Together, these exceptional finalists represent a diverse group of financial leaders who are driving innovation and shaping the future of the industry.

Here is a summary of their?key innovations:

• Customer-Centric Digital Transformation:?Financial institutions are placing a strong emphasis on prioritising the needs of their customers in their digital transformation efforts. Substantial investments are being made in cutting-edge technologies, such as artificial intelligence and big data, to enhance operational efficiency and provide personalised services. These transformative technologies enable institutions to better understand customer preferences and deliver tailored experiences that meet their evolving expectations.
• Building Collaborative Ecosystems:?Recognising the power of collaboration, financial institutions are actively establishing strategic partnerships with diverse ecosystems. These partnerships span a range of initiatives, from offering Banking-as-a-Service to creating marketplaces, and even collaborating with fintech companies to leverage their expertise and technology. By harnessing the strengths of these ecosystems, incumbent institutions and banks can rapidly and efficiently develop innovative digital products and services that align with the ever-changing demands of customers.
• Proactive Development of Digital Offerings:?Financial institutions are taking a proactive approach in developing a wide array of digital offerings to cater to shifting customer preferences. Mobile banking apps, online payment solutions, and digital lending platforms are just a few examples of the innovative products and services being introduced. These digital solutions not only provide convenience but also address the evolving needs of customers in an increasingly digitised world, empowering them with seamless and user-friendly financial experiences.
• Investment in Talent:?Recognising that employees play a pivotal role in driving innovation and delivering exceptional customer experiences, financial institutions are placing significant importance on investing in their workforce. They prioritise talent development and growth by fostering a culture of continuous learning and skill enhancement. By equipping their employees with the necessary expertise, institutions ensure they stay competitive in the dynamic financial landscape, enabling them to anticipate customer needs and deliver superior services.

The collective efforts of these financial institutions in investing in digital technology, building ecosystems, developing new digital products and services, and investing in their people are driving significant advancements in the industry. By embracing digital transformation, these institutions are not only future-proofing their operations but also setting new standards for innovation and customer-centricity in the financial sector.

"The key thing about it is determining what information can be shared out and how it should be shared out. And then, you know, in Singapore's case, (data) authorisation is by the individual... similar to when we talk to customers in terms of data integration, and so on. It's about creating more self-awareness and self-service for the different parts of the business to be able to use that data set as and when needed." - Ssu han Koh , Director, Solution Engineering, APAC, Talend

"So again, there's just the holistic approach, and a good policy, a good security policy, and the threats response policy, like incident response policy as well, that's required for you. Yeah, just make sure you've got everything in place, in terms of okay, this system operates without data, and this is how we protect that. So it's essentially just being very, very thorough in terms of knowing where, what and how [data is] located." - Ivan Kinash , CEO, Licel

It is clear that the traditional banking landscape is changing rapidly. Financial institutions that are able to adapt to the changing environment will be well-positioned to succeed in the years to come.

Join us in our upcoming in-person conferences & exhibitions, where esteemed banking leaders will take center stage:

• Raja Teh Maimunah , Chief Executive Officer,?ACS Digital Berhad (AEON Digital Bank)
• Yew Choong Chew , Chief Data Officer,?AmBank Group
• Naphongthawat Phothikit , Director,?Bank of Thailand (BOT)
• Ma. Cristina Ginbee Go , Executive Vice President, Head of Consumer Banking,?Bank of the Philippine Islands (BPI)
• Chuchi G. Fonacier, Deputy Governor of the Financial Supervision Sector,?Bangko Sentral ng Pilipinas (BSP)
• Jovelyn Hao , Head of the Fintech Innovation and Policy Research Group (FIPRG),?Bangko Sentral ng Pilipinas (BSP)
• Rangga Wiseno , Chief Product Officer,?DANA
• Anil Kumar Saha , Senior Vice President,?DBS Bank
• Sazulhisyam Samsuri , Chief Technology Officer,?KAF Digital Bank
• Martha Sazon , President & Chief Executive Officer,?GCash
• Marlon Sorongon , Chief Information Security Officer,?Maybank
• Triyono Gani , Executive Director,?Otoritas Jasa Keuangan (OJK)
• Lito Villanueva , Executive Vice President and Chief Innovation and Inclusion Officer,?Rizal Commercial Banking Corporation (RCBC)
• Carlos Tengkiat , Chief Information Security Officer,?Rizal Commercial Banking Corporation (RCBC)
• Tran Thanh Hoai , Director Retail Digital Banking,?Techcombank
• Henry Aguda, FICD , CEO and President,?UnionDigital Bank

Find out more about our 2023 AIBP Conference and Exhibition?

• 40th Edition, AIBP C&E Malaysia, InterContinental Kuala Lumpur , 4 - 5 July 2023
• 41st Edition, AIBP C&E Philippines, Marriott Manila , 11 - 12 July 2023
• 42nd Edition, AIBP C&E Vietnam, The Reverie Saigon , 1 - 2 August 2023

Or our activities with ASEAN Banking and Financial Institutions here .?

Alternatively, do feel free to reach out to us at [email protected] if you wish to join us, or if there are topics in digitalisation you would like to hear more of!