APAC banks outpace EU in digital adoption although branches still needed

Malaysia and the Philippines expanded their branch networks between 2019 and 2023.

Banks in the Asia Pacific region outpace their European peers by a median of 4.5% in digital adoption, although physical branches are not going anywhere for some markets.

Digital channels now account for 60% of basic financial product activities across the region, according to research by Kearny published in May 2025.

E-wallets in particular now account for over 70% of regions e-commerce transaction value, and 50% of point-of-sale transaction value. This is the highest in any region globally, Kearney said.

Despite the shift to digital, branches still matter for consumers.

In-person support is preferred for “complex, high-value products” like mortgages and consumer lending, Kearney found. Currently, 41% of mortgages, and 59% of lending, are completed digitally.

Malaysia and the Philippines notably expanded their branch networks between 2019 and 2023, growing by 1.3% and 8.5%, respectively.

The growth “captured new, presumably unbanked consumers in parity with the number of branches,” Kearney said.

Indonesia, meanwhile, saw a 14.3% decrease in physical branch numbers. During this period, non-traditional lenders and neobanks captured 11% of Indonesia’s banking customer base, according to Kearney.