Expansion of digital infrastructure in Asia, rapid development of the financial sector
Julius Conley
13 / January / 22
Visitors: 951
The rapid digitization of financial services in Asia is a consequence of the maturation of new classes of wealthier consumers, a pandemic that has accelerated the digitization of many areas of life, and the implementation of open banking principles and regulations.
Asians, referring to the title of a famous film, become fabulously rich. As much as half of the global increase in consumption in the current decade will occur on the world's most populous continent. The value of consumption is estimated by McKinsey.
This means that the new masses of people will become part of the consumption class, which in 2000 could only include 15 percent. population. In 2030, it will be 70 percent. The result is rapid urbanization, and city consumers are to be responsible for 85 percent. increase in purchases of consumer goods.
Hand in hand with these trends is the rapid development of digital finance, which the pandemic has greatly accelerated, especially in emerging markets. Back in 2017, an average of 54% used digital banking in countries such as China, Indonesia, Malaysia, the Philippines and Vietnam. inhabitants, this year there are already 88 percent of them, which is slightly less than in Australia, Hong Kong or Singapore (90 percent), according to the Personal Financial Services Survey. Characteristic is the increase in the use of fintech applications and the use of digital wallets in payments, which is already reached by over 50 percent. customers of financial services, and 85 percent. of them live in cities.
There are already nearly 70 digital banks in the Asia-Pacific region, which is over 20 percent. their numbers in the world.
The infrastructure for instant payments is already in use in 11 countries of the region, including China, South Korea, Singapore, Malaysia, Japan and Thailand. Soon other countries will join, such as Vietnam, Indonesia, the Philippines and even Myanmar, although these are the least banked countries until recently, not only in Asia, in the world. Digital players enjoy great trust among consumers - banks are trusted by 75 percent. customers, technology players 65 percent. and social media operators 55 percent.
Super applications and digital banks
There are already nearly 70 digital banks in the Asia-Pacific region, which is over 20 percent. their numbers in the world. In 2020 - the first half of 2021, they acquired 135 million customers, and this translates into a total of almost 440 million fully digital users, the so-called neo-banks. A large number of them have the support of large technology players, global and local banks and e-commerce companies. According to BCG analyzes, only a few are profitable in the new window, but most of them do not function for more than five years.
The most effective players use data-rich customer bases built in other business sectors and technologies proven there. This allows you to get to know your customers better and customize your offer, which results in their greater loyalty and the ability to sell a range of financial products. Due to the recognized brands, the level of trust in them is higher than in the case of competing entities. It all adds up to the speed of business scaling. Their significant advantage is also the fact that they have customers in digital channels earlier, so they do not have to incur additional costs here, also in the field of risk management, because they use e-commerce and social media transactional data to assess customers' creditworthiness. What's more, they can also use marketing activities proven in other areas.
The world's largest mobile payment platform controlled by Ant Group is Alipay with a billion users.
The so-called great applications, which are supported by technology companies offering a full range of products on their platforms - from transport services, travel through food delivery, medical appointments, to digital payments, loans and capital management, and insurance. One of the largest is controlled by the Chinese technology giant Tencent Holding WeChat, which has nearly a billion users, and those using financial services as part of the largest digital bank in the world, WeBank, over 200 million. Its competitors are entities controlled by Ant Group, part of the Alibaba conglomerate. These include the digital MYbank with 35 million customers - consumers and small businesses. The world's largest mobile payment platform controlled by Ant Group is Alipay with a billion users.
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