Asia Pacific banks race to digitise banking due to intense competition
According to in-depth studies released by Temenos, throughout the Asia Pacific (APAC) region bankers are racing to digitise banking. Reports generated by The Economist Intelligence Unit (EIU) on behalf of Temenos found competition to be intensifying between retail banks and technology/ecommerce distributers.
Of the 405 global banking executives surveyed on the changes they see taking place in their industry, 60% believe major tech companies such as Apple and Google to be the biggest threat to APAC bankers, compared with 25% who pointed to neo-banks, such as Monzo. Other big threats indicated by those surveyed include new technologies such as AI, machine learning and blockchain.
With these threats in mind, 37% of APAC bankers have digital marketing and engagement as their top strategic priority by 2020, while 29% feel “migrating client usage to digital from physical channels is the top priority by 2025.
APAC Managing Director at Temenos, Martin Frick, commented: “Asia-Pacific bankers are acutely aware of the race they find themselves in against technology giants that have the capital and scale to take market share from established players. Neo-banks are not far behind and have the flexibility to outmanoeuvre major banks on the margins. To remain relevant, retain customers and appeal to the evolving demands of younger generations, banks must master digital engagement, and quickly.”
However, the “main concerns about open banking are the ability to capture customer data… third-party relationship vulnerability being exploited… and an inability to protect against cyber-attacks”. This is due to regulations across the APAC region developing differently. As a result, “37% of bankers believe… emerging regulation in areas such as data protection and digital taxation will have a significant impact on the banking sector.”