BRANDED CONTENT
BT FUTURE OF FINANCE
Published: SEP 27, 2024
Revolutionising ASEAN connectivity - UOB's digital banking innovations
This episode was brought to you by
Henry Choi
group head, group retail TMRW, UOB
THE global banking landscape is experiencing a transformation due to technology. In this episode brought to you by UOB, correspondent Howie Lim, explores how digital banking is reshaping ASEAN - featuring insights from Henry Choi, group head, group retail TMRW at United Overseas Bank (UOB).
A catalyst for regional connectivity, digital banking has grown rapidly in the ASEAN region. According to Henry, digital banking is poised to take up to two-thirds of global wallets in the Asia Pacific, where many people now prefer not to use cash. The Covid-19 pandemic accelerated this shift, pushing people towards digital payments even faster.
Factors driving digital adoption in ASEAN
The success of digital banking varies across countries depending on their stage of economic maturity. In ASEAN, despite diverse GDP levels, technology adoption rates are high.
Powering innovation through ASEAN
UOB all-in-one TMRW app
Embracing digital transformation
Produced by: Howie Lim, Claressa Monteiro & Chai pei chieh Edited by: Howie Lim & Claressa Monteiro
DIGITAL DESIGN: CHARMAINE MARTIN
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Even excluding Singapore, many ASEAN countries demonstrate significant smartphone penetration, facilitating the digital banking revolution. This allows global players like UOB to compete effectively without heavily investing in physical branches across large countries like Indonesia, Thailand, Malaysia, and Vietnam.
Aside from the Covid-19 pandemic, the youthful demographic in ASEAN plays a crucial role. Henry highlights that unlike the ageing populations of other regions, nearly half of ASEAN’s population is young and digitally savvy. However, he cautions against overlooking the tech adoption potential among older generations. Mobile phone penetration also drives digital banking growth. Thanks to affordable smartphone models and the wide compatibility of digital banking apps, even people in less affluent areas can access digital financial services. This widespread access is crucial for financial inclusion, particularly in underbanked and rural areas.
Enhancing financial inclusion in rural areas
Financial inclusion remains a significant challenge in many large ASEAN countries where substantial populations live outside major cities. According to Henry, digital banking, through mobile apps, has radically changed this landscape. It allows banks to serve underserved populations without the need for extensive physical infrastructure. By collaborating with governments and complying with regulations, banks like UOB can extend their reach, providing financial services to people who would otherwise be excluded.
The role of SMEs in ASEAN's economy, small and medium enterprises (SMEs) are vital to ASEAN’s economy, creating jobs and driving growth. However, they often face challenges such as limited access to financial services. Henry explains that traditional banking models struggle to support SMEs due to concerns over financial risks. By understanding an SME's ecosystem, including its buyers, suppliers, and cash flow, banks can make better decisions on offering financial support.
Cross-border payments and regional integration
UOB’s TMRW app, launched in 2018, supports real-time fund transfers across ASEAN. Henry shares that UOB's app allows seamless cross-border payments, helping to avoid currency exchange issues and promoting regional connectivity. This QR-based payment system extends beyond retail payments to support trade and travel within ASEAN.
Despite technological advances, challenges remain. Protecting customers from fraud and ensuring regulatory harmony across borders are critical. Progress is ongoing, with frequent discussions among central banks in ASEAN, drawing inspiration from the European Union’s model.
The journey ahead
UOB’s extensive footprint in ASEAN positions it to influence regional banking practices positively. By engaging in dialogue with governments and providing innovative solutions, UOB aims to drive further integration and convenience in digital banking. In conclusion, digital banking is a catalyst for regional connectivity in ASEAN. With its young, tech-savvy population and high smartphone penetration, the region is uniquely positioned to benefit from digital financial services. By overcoming regulatory and technological challenges, banks like UOB can ensure that digital banking drives inclusive growth and economic development in ASEAN.
Listen to the full podcast for more on UOB’s digital banking innovations. For more episodes, go to bt.sg/podcasts and if you have feedback or an episode idea, please get in touch at btpodcasts@sph.com.sg.
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