How cloud banking can enhance financial inclusion across South-east Asia (The Business Times)
Today, more than one billion people across Asia Pacific do not have access to formal financial services. Southeast Asia experiences particularly low levels of financial inclusion, with nearly three quarters of the population either ‘under-banked’, i.e. with limited access to financial services, or ‘unbanked’, i.e. completely excluded from the current financial services landscape.
The Philippines ranks among the lowest in Asia for financial inclusion, with only 34 per cent of Filipino adults holding a bank account. Less than half (49 per cent) of Indonesian adults are ‘banked’, however, while financial inclusion in Indonesia remains low, the country saw e-money transactions increase by 173 per cent in the year ending January 2020, indicating a keen appetite for digital financial services.
Conversely, high performing Asean countries including Malaysia and Thailand have relatively high rates of financial inclusion (85 and 82 per cent respectively), and Singapore has close to 100 per cent of its population banked. These countries need to lead by example in enabling financial inclusion across the region.
Drivers of financial inclusion
One of the key drivers of financial inclusion across Southeast Asia has been rapid change and technological innovation in the financial services sector. Technology innovations transforming the financial services landscape in Southeast Asia include new forms of online payment, such as eWallets, which have experienced phenomenal growth in the region, and other new digital banking products that incorporate AI (artificial intelligence), data analytics and cloud technology to provide a personalised customer experience, all via a smartphone.