They focus on digital innovations to improve risk management.
In a survey of senior executives at 221 banking institutions across Asia-Pacific, Europe, North America and emerging markets, EY finds that more than half of banks across Asia-Pacific aspire to become digitally mature or digital leaders by 2020, including 22% of Singapore banks.
Jan Bellens, EY global banking and capital markets deputy sector leader, says that banks in the developed Asia-Pacific markets, and particularly those in Japan, are comparing their maturity levels with those of emerging regional competitors, who have more digitally focused business models.
“Asia-Pacific has a much higher penetration of digital and mobile technology adoption than many other regions. Mainland China, for example, has the highest rate of FinTech adoption in the world and many of the big cities there are effectively operating as cashless environments,” says Bellens. “There is an obvious recognition among Asia-Pacific banks of the urgency of embracing digitalization, with 60% in the developed and 57% in the emerging Asia-Pacific markets aspiring to reach digital maturity by 2020, almost on par with the global average of 62%.”
Here's more from EY:
Banks in developed Asia-Pacific markets (Hong Kong, Australia and Singapore) list their top priorities for the year as developing partnerships with FinTechs, investing in technology to reach customers and improving risk management, with 82% listing these as their top business priorities for 2018. As part of their internationalization strategy, a majority 80% of Singapore banks are focused on partnering in key overseas markets, while funding these partly via asset sales as they regroup resources away from non-core markets.
Meanwhile, banks in the emerging Asia-Pacific markets (mainland China, India, Malaysia and Indonesia) are focusing on implementing a digital transformation program, gaining efficiencies through technology, and enhancing data and cyber security.
The majority (75%) of banks in developed Asia-Pacific markets and half (50%) in emerging Asia-Pacific markets are planning to set up new partnerships or JVs in their core markets in 2018. So, we are likely to see greater collaboration between Asia-Pacific banks and e-commerce or other technology platform players, particularly as open banking reforms progress in markets such as Australia, Hong Kong and Singapore.
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