Asia/Pacific's time as the world's leader in financial services has come.
With sustained annual lending growth of 13.7% since the start of the decade, the Asia/Pacific region continues to distinguish itself from the rest of the world as a relentless growth engine. Meanwhile, its retail and transaction banking businesses, each clocking in double digit expansions of 15% yearly, are poised to collectively reap annual revenues in excess of US$1.0tn from 2016 onwards. Various other strategic segments, ranging from corporate banking, to insurance and capital markets, are similarly posting growth projections that are exceeding global forecasts.
These numbers are certainly impressive, but they are proving to be only the beginning of even better times to come. IDC Financial Insights expects:
- The ASEAN Economic Community (AEC) to drive momentum from 2015, as market opportunities compound multifold given a 700 million-strong integrated market;
- Local and multi-regional players to converge over the next five year on major M&A opportunities in their journey to build scale and capabilities that befit a New Asia; and
- Half of the asset growth in global financial services, and at least 50% of portfolios of the 100 largest banks in the world will originate from Asia by 2020.
Quite rightfully, the rise of Asia has brought forth a redefinition of financial services in the region's markets, resulting in a slew of best practices that Asia is ready to share with the world:
- Firstly, Asia's maturing customers are placing unique demands for instant gratification, hyper-personal interactions, 24x7 services, and digital touch points that are correspondingly raising institutions' standards of engagement with customers. Also because of significantly raised criterions for data privacy and security worldwide, customer experience in the future will simply be better than it is today. Leading Asian institutions will drive innovations in this space and continue to develop the right, customer-centric propositions for their markets.
- Secondly, disintermediation by retail and e-commerce companies continues, and the most significant of these have been conceived within Asia itself. This has come from unexpected areas: not just in retail transactions and payments, but also in wealth management, lending, and quasi- retail banking propositions. Simply put, Asia will see the widest range of disruptions in financial services and the region's institutions will need to come up with playbooks for dealing with the new competitive dynamics of our time.
- Furthermore, the highest growth rates in the adoption of Cloud, Mobile, Social, and Big Data are being seen in Asia. These provide an impetus for change in how financial services are delivered – making it better, more personal, more agile, and more cost-effective. The region's financial institutions will successfully scale up piloted concepts like the omni-channel, lifestyle banking, gamification and social finance, all of which will inevitably redefine financial services as we know it.
IDC Financial Insights’ Asian Financial Services Congress (AFSC) will continue our decade-long commitment of bringing together the best minds of the industry to discuss the latest developments, opportunities, and disruptions in the region’s financial sector.
At AFSC 2015, the team from IDC Financial Insights together with the industry will map out our exciting journey towards true Asian leadership in global financial services.