With the boom in digital economy across Southeast Asia, financial institutions need to accelerate their transformation, a new EY report reveals.
Financial institutions in Southeast Asia and Hong Kong are well underway in their journey toward digitalization. Banks are among the leaders with 91 percent indicating that they have initiated some levels of digital adoption in their organization. This is followed by the insurance sector (83 percent) and the credit and payments sector (75 percent).
Interestingly, the wealth, fund and asset management sector revealed a decisive split between digital progressives and digital laggards: a third (33 percent) of wealth, fund and asset management companies have fully embraced digital, while half (50 percent) are still assessing the need for digital adoption.
Lack of Suitable Talent
For the wealth, fund and asset management sector, the lack of suitable talent to drive technology transformation projects (33 percent) was a top concern.
This is according to the EY report «Driving digital into the heart of Asia’s financial services industry», which surveyed over 140 senior executives in the financial services sector across Southeast Asia (Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam) and Hong Kong (executives who have a regional remit that includes Southeast Asia).
Digital Economic Spur
«With the expected boom in digital economy across Southeast Asia, financial institutions that seek to tap on this digital economic spur need to accelerate their transformation accordingly,» Brian Thung, EY Asean Financial Services Leader, said.
The survey also revealed that financial institutions in Malaysia are leading the pack in digital adoption as 36 percent of them have fully embraced digital. This is followed by Vietnam (33 percent), Singapore (29 percent), Indonesia (25 percent), Philippines (20 percent), Hong Kong (19 percent) and Thailand (17 percent).
Benefits of Partnerships
Singapore executives appear to be most buoyant over the benefits of these partnerships, with 32 percent of all respondents believing they add value to their organization. Brian Thung (pictured above) added.
Particularly, the survey revealed that legacy infrastructure appears to be the most significant hurdle for banking (34 percent) and insurance (33 percent) institutions as well as credit and payments companies (38 percent). Notably, the challenges of integrating legacy infrastructure with digital are felt most acutely among respondents from the Philippines (50 percent), Hong Kong (41 percent) and Singapore (36 percent).
Well-placed for Success
«Overhauling legacy systems or adopting interoperable technologies can be a resource-intensive project for financial institutions. Financial institutions that understand how and where to look for the right industry partnerships to gain access to opportunities to grow their customer base will be the ones that are well-placed for success,» Liew Nam Soon (pictured above), EY Asean Markets Leader, said.
