In Focus
CARDS & PAYMENTS | Staff Reporter, Singapore

ASEAN banks lead digital charge with soaring investment on real-time payments

Singapore banks lead the pack as over half pledge to increase investment by over 5%.

Six in 10 (64%) financial institutions in the ASEAN region expect heightened investment in developing and modernising payment infrastructures in the next 18 to 24 months in an effort to cater to a growing online banking userbase, according to a report from ACI Worldwide. 

The region powers ahead in its commitment to digitise its banking systems compared to financial institutions in Europe (48%) and Americas (47%). 

Almost half of regional banks believe digital and immediate payments will boost retail customer product and services (42%) followed by enhancing KYC and AML offerings and liquidity management.

A third (31%) of ASEAN banks also believe immediate payments will enhance SME/busienss product and services and exception handling. 

Despite the commitment to digital transformation, countries differ in terms of investment plans and maturity of digital models with Singapore banks leading the pack.
Over half (53%) of banks in the city-state anticipate digital investment to rise by more than 5% in the next two years. 

“In part, this can be explained by the prominence of Singapore as a regional financial hub, but it also points to a continuation of investment in competitive service improvements following several years of investment in the underlying infrastructure,” the report noted. 

“This includes the implementation of an addressing database allowing the use of mobile phone numbers as a proxy for account details, extending the integrating with PayNow, Singapore’s first peer-to-peer funds transfer service and the development of overlay services.”

The Philippines follows closely as almost half (40%) of banks anticipate over 5% increase in digital investment whilst the rest anticipate a more modest shelling out of capital between 1-5%.

A third (30%) of banks in Indonesia anticipate substantial (over 5%) in digital investment whilst only 13% in Malaysia and Thailand are going full steam ahead with their digital models after pledging substantial capital investment. 

Most countries in the region also prefer packaged and customised third-party solutions instead of developing the software solutions in-house. 

“The ASEAN member states are taking a very proactive stance that is driving toward a pan-regional real-time payment network across Asia, and innovators such as PayNet and DBS have powered ahead. This kind of approach will allow financial institutions to cover customer segments from retail to SME and merchants to wholesale.” 

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