The Future of Digital Banking in Asia

Asian banks have a significant advantage when it comes to digital payments. Familiarity with app-based services is expected to grow in the coming years

FREMONT CA: When it comes to digital payments, Asian banks have a significant advantage. Pacific payments and receivables head, treasury and trade solutions stated that the digital payments revolution continues to lead the way in APAC. Advances in technology, progressive legislation, a diverse set of competitive competitors, including established providers and new fintech entrants, increasing customer needs, and rapid digitization resulting from the pandemic are all accelerating the speed of transition. Further commenting, he also said that digital banking in Asia would be defined by frictionless, global, and ubiquitous transactions, with capabilities agnostic to payment methods or forms of storage spanning cards, digital wallets, bank accounts, and open banking.

Asia is likely to remain at the forefront of electronic, mobile, and social commerce due to these rapid advancements in the region's digital payments. The ongoing internet penetration in Asia, thanks to the rollout of 5G in South Korea, Taiwan, Japan, China, and Thailand, will intensify this phenomenon.

Digital payments are at the core of e-commerce, which has increased to over 50 percent of card purchases three years ago, noted Bhatia. With Apple Pay, customers can now complete one-click checkouts. Peer-to-peer and merchant payments have also skyrocketed, quickly adopting these services in Hong Kong's Faster Payment System (FPS).

Technological innovation is the key to e-commerce's success in Asia. Better mobile internet connection and broad smartphone ownership, as well as the deployment of cloud native-enabled technology architecture, will accelerate Asia's use of QR codes. These machine-readable matrix barcodes streamline transactions by sending data between mobile phones and other devices in real-time.

Moreover, 97 percent of Asia–Pacific customers believe the digital channel will be the better option for interacting with their bank. They use it as one of several channels in a multichannel or omnichannel offering. The market size for economically deprived individuals and businesses in the Asia Pacific is expected to be between $55 billion and $115 billion.