The development and penetration of the financial sector in local Asian markets confirms that the future has arrived in the region. Taxis, groceries, and all types of other goods and services, can now be paid for from devices that fit into the palm of our hand without a physical exchange of cash. Soon, transactions will become even simpler as an open banking model takes hold and fosters more innovation through integrations with third parties.
The digital age is truly redefining how banking services are delivered, the types of businesses offering these services, and consumer expectations of the services they receive. In the Asia Pacific region, fintech startups, digital-only banks, and companies outside of the financial services sector have taken an early lead in offering services to attract the region's rapidly-growing, savvy middle class. Legacy systems and obsolete regulations are making it difficult for traditional banks to compete in this environment. However, a key advantage that these banks have is their customer data, which is essential to survival in the digital economy.
Asia Pacific leading financial sector evolution
Asia's emerging markets are quickly becoming major engines of growth and innovation in global banking. McKinsey estimates that as incomes rise and the share of middle class households expands to two-thirds, personal financial assets in the Asia Pacific region will total USD 69 trillion by 2025, three-quarters of the global total. Over 77% of these customers prefer digital banking over visiting physical branches for an increasing variety of services. This is especially true in mobile-first countries like China, India, Thailand, and Indonesia.
Established models in banking have also become obsolete, as innovators such as Alipay and WeChat Pay help to reorganize economic activity around new models to address the explosion of the e-commerce sector. For banks to match these nimble, non-banking competitors, they must rely on data and its internal management to support the introduction of new services. Cross-selling and referral opportunities become easier to identify when high-quality, secure data is available. Technology solutions to address data management not only optimize customer acquisition, but also simplify compliance.
This year's pandemic and travel restrictions accelerated the development of these digital services among traditional banks to enable data-driven customer experiences that reflect a clear understanding of their purchase journey and preferences. In Thailand, KBTG bank resolved data issues that prevented them from offering the digital banking choices that would fit their customers' lifestyles. Now, its 16 million retail banking customers can perform all activities on a mobile device and it handles up to 10 million digital transactions per day.
A modern approach to banking services
Open banking, which is enabled by a series of technology solutions, regulations and services, takes digital services a step further. It allows faster, more secure transactions to take place anywhere in the world through third parties. Consumers gain more choices, better service, and the opportunity for frictionless commerce. With a click or voice command, they can send money and gifts using social media or a payment platform. API-connected integrations effectively remove the extra steps of logging into the account on the bank's website to enter payee details. However, concerns about data breaches have prompted the creation of regulatory frameworks to facilitate development with minimal risk. Singapore, Hong Kong, and Australia have taken an early lead in embracing open banking, and developing markets in the region are not far behind.
The banking industry, and the traditional model that it has relied on for decades, is transforming to address the modern, digital world. Leveraging data to improve customer experiences allows banks to build loyalty among mobile-first customers. Competition from non-traditional banking players and the emergence of open banking systems are industry forces that are too powerful to deny. Adopting new technology solutions with data as the backbone driving growth is critical if incumbent institutions want to stay around to witness the next 100 years of banking innovation.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Asian Banking & Finance. The author was not remunerated for this article.
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An experienced senior executive with over 25 years in the information technology industry, Erich Gerber is responsible for TIBCO Software’s business across international markets, which consist of Asia Pacific, Europe, Middle East, and Africa.
Erich has wide experience covering global markets, direct and indirect sales, as well as Infrastructure and BI software. Having led various organisations in senior leadership positions with American- and German-driven company structures, Erich is an adept and adaptable leader with a keen focus on developing global customer relationships and bringing to market timely solutions that deliver value.
With his extensive experience and track record for overachievement, Erich has built teams that have delivered significant growth by fine-tuning business operations and successfully managing profitability.
Having joined TIBCO Software in 2009 as the Regional Vice President for the Central and Eastern European, and Nordics region, Erich doubled the licensing revenue for the markets under his purview between the financial years of 2009 and 2012. Under his stewardship, the total revenue of these markets had also increased by 75%, which constituted approximately 10% of the company’s overall revenue.
In late 2014, Erich was appointed as the Vice President for Global Sales Operations at TIBCO Software’s headquarters in Palo Alto, US, where he spearheaded the company’s transformation initiatives, in addition to his global revenue and sales responsibilities.
Erich then continued the journey as the General Manager for Asia Pacific Japan in 2016 where he led the sales function by executing a strategic go-to-market plan that fosters deeper customer engagements, strengthens partnerships, and builds a greater network of alliances in the region.
Prior to TIBCO Software, Erich was the Senior Vice President for Europe, Middle East, and Africa (EMEA) at WebGain and the Vice President for EMEA Operations at BEA Systems, subsequently acquired by Oracle.
Erich has a Bachelor’s degree in Management from BPIH, Switzerland and a Master’s degree in Marketing from the Swiss Federal Institute.
He is married, a father of two, and is a sports and fitness enthusiast who engages in skiing, as well as cycling, in his spare time.