Bain & Company’s Edy Widjaja offers insights on Southeast Asia's banking evolution

Delve into the perspectives of Bain & Company’s Edy Widjaja on thriving amidst digital banking challenges and seizing emerging opportunities in Southeast Asia.

The banking and finance sector in Southeast Asia has undergone significant transformations in recent years, driven by technological advancements, changing customer preferences, and increasing emphasis on sustainability.

As the region's financial services landscape continues to evolve, it faces both opportunities and challenges. One individual who possesses valuable insights into these developments is Edy Widjaja, a Partner and Leader of Bain & Company's Southeast Asia Financial Services Practice. With over two decades of experience in consulting, industry, and academia, Widjaja has worked with various financial institutions and played a pivotal role in driving strategy, performance improvement, and change management.

Widjaja's expertise spans multiple industries, including financial services, consumer products, retail, and technology. Before joining Bain & Company in 2010, he held significant positions, such as Corporate Venturing Manager and R&D Project Manager at NV Bekaert SA. Widjaja holds an MBA from INSEAD, where he earned a place on the Dean's List and a PhD in Materials Science and Engineering from Northwestern University. He also earned a BEng in Metallurgical Engineering from the University of Indonesia. As a Partner at Bain & Company, Widjaja leads the financial services team across five offices in Southeast Asia—Bangkok, Jakarta, Kuala Lumpur, Manila, and Singapore—showcasing his remarkable leadership capabilities.

In an interview with Asian Banking & Finance, Widjaja brings a unique perspective to evaluating the innovations and impact of financial institutions in the region.

Thriving amidst digital banking challenges

Widjaja stressed that customer experience has become a critical differentiator in the banking landscape. The benchmark, he emphasised, has been set by everyday experiences. Notably, digital banks are emerging as major players in this space, setting higher standards that translate to elevated Net Promoter Scores. As digital banking continues to gain traction, the industry faces a shift from innovation-focused offerings to making digitalisation a fundamental part of banking services.

It is worth noting that the digital banking space in Southeast Asia has witnessed rapid growth. The entrance of numerous fintechs and superapps underscores the need for collaboration amongst digital banks to expand their services and outreach within this ecosystem.

As the competitive landscape becomes more crowded, digital banks need to focus on scaling up their operations effectively to stay relevant. Attracting talent is also a significant aspect of this competitiveness. The financial services sector in Southeast Asia is now entrenched in a heightened talent war, driven by evolving individual motivations that demand personalised employee value propositions. Responding to this, banks must prioritise long-term reskilling initiatives to cultivate a skilled workforce and retain top talent in an intensely competitive market.

To finance investments and drive growth, banks are increasingly required to focus on cost efficiency. To streamline processes and allocate resources more effectively, Widjaja said, “Banks increasingly need to simplify operations through digitisation and automation.”

Additionally, in the banking sector, Environmental, Social, and Governance (ESG) factors are gaining remarkable prominence, particularly in the emerging economies of Southeast Asia. Banks have the opportunity to gain a “first-mover” advantage by integrating sustainable practices, creating value, and addressing pressing societal and environmental challenges, amongst other considerations.

Seizing banking opportunities in Southeast Asia

In Southeast Asia, banks are progressing from early-stage data analytics development to advanced phases with a focused use-case roadmap. Leveraging data effectively empowers financial institutions to deeply understand customers, make informed decisions, and elevate overall performance.

Within the region, an untapped market awaits in digital small and medium enterprises (SMEs) banking. Addressing this whitespace presents banks with a promising opportunity, as noted by Widjaja. “Banks need to enhance turnaround time and customer experience to capture an underserved market,” he said.

However, successful strategy implementation and reaping benefits require an unwavering commitment to execution. The essential discipline of execution remains a linchpin for achieving positive outcomes and adapting to the dynamic conditions of the market.

As a judge in the Asian Banking & Finance Awards, Widjaja emphasises several key factors when evaluating financial institutions in the region. He looks for innovative solutions that pioneer advancements within the financial services landscape—solutions that were not done by banks before.

The scale of impact also plays a crucial role in the evaluation process. Solutions that have a significant and positive influence on a broad scale are recognised for their contributions. Lastly, Widjaja considers the complexity of the problems financial institutions tackle with their solutions. Addressing intricate challenges showcases the institution's capabilities and ingenuity.