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How digital revolution is transforming banking & financial services in Asia
The digital revolution in Asia has also changed the landscape for new players to enter the industry, with the number of fintech companies rising year by year. As a result, Asian economies have advanced significantly, leapfrogging into new technologies. For example, the total amount paid for goods and services in China via mobile payments in 2016 alone was $790 billion (https://www.weforum.org/
Financial technology can also aid potential growth and poverty reduction by enhancing economic development, inclusivity, and efficiency. Fintech can assist millions of people and small and medium-sized businesses gain affordable access to financial services, especially in developing nations. These technologies may potentially help the banking industry achieve significant efficiency benefits. They can, for example, offer cross-border payments that lower risk and costs.
The banking sector was one of the first industries to be disrupted by technology, with innovations such as mobile banking apps, net banking, and contactless payments. Additionally, the global pandemic of Covid-19 has accelerated the pace of digitization in Asia as more central banks adopt digital banking to foster better financial inclusion.
With this change came a shift in customer expectations when it comes to customer service- now, customers want more sophisticated services that are available at any time of day or night. According to a McKinsey study on personal financial services, Asian consumers are getting more comfortable utilizing mobile and internet channels for banking services, with usage increasing by more than 35% on average (https://www.mckinsey.com/
Several approaches to the Asian banking sector have been utilized to achieve this. Connectivity, automation, innovation, and decision-making are the primary four interconnected, mutually reinforcing factors. Connectivity is the term used to describe how banks may leverage fast-increasing social networks to promote loyalty and disrupt competition. The application of digitalization in process re-design for a better customer experience and more efficient use of resources is referred to as automation. Given the quick speed of change in the sector, innovation relates to how banks should continue reinventing themselves. Decision-making uses big data to make better, quicker, and more accurate judgments about customer purchases and bank decisions about risk.