Over a billion people in the Asia Pacific also lack structured financial services. Looking closely at Southeast Asia (SEA), financial inclusion is very poor, with nearly three-quarters of the population being either underbanked or unbanked.
On the other hand, Cloud banking has been the catalyst in recent years, with fintech and banks offering revolutionary cloud-based financial products that are transforming the face of financial services across the country.
To put this in perspective, the Philippines has one of the lowest financial inclusion rates in Asia, with just 34 percent of adults having a bank account. In Indonesia, financial inclusion remains limited, with 49 percent of Indonesian adults having a bank account. However, in January 2020, e-money transactions increased by 173 percent, suggesting strong demand for digital financial services.
High-performing Asian countries such as Malaysia and Thailand, on the other hand, have significantly higher rates of financial inclusion, with 85 percent and 82 percent of their populations’ banking, respectively. In contrast, Singapore has close to 100 percent of its population banking. Rapid change and technological growth in the financial services sector have been primary drivers of financial inclusion in Southeast Asia.
Attract With Cloud Banking
New types of online payment, such as e-wallets, and other new digital banking products that integrate artificial intelligence (AI), data analytics, and cloud technology to provide a customised customer experience, all through a smartphone, are among the technological advancements changing the financial services landscape in Southeast Asia.
Thus it implies that financial institutions that use cloud banking will appeal to a broader customer base, especially those segments of the population that have historically been disconnected from primary banking institutions.
They can fill the gap between formal financial services and customers who have long been wary of financial institutions, especially Millennials and Gen-Z consumers. By eliminating the requirement for consumers to visit a branch to sign up and making products accessible through mobile apps and online.
While banks have been reluctant to migrate to the cloud in the past due to security and privacy concerns, regulators have also been cautious about the cloud’s potential for aggregate risk. These concerns have, however, been resolved in recent years. Cloud is now seen as just as stable, if not more so, than on-site. It’s just as resilient, too.
Today’s advancements in digital technology are once-in-a-generation banking opportunities. As the IMF says, this includes an option for inclusive banks to expand financial inclusion on an epic scale. It is a challenging world for inclusive banks, but innovations like Cloud and SaaS are there to help make a big difference.