Digital banking penetration has grown 1.5 times to 3 times in Emerging Asia since 2014, said McKinsey.
McKinsey revealed in its proprietary Personal Financial Services (PFS) survey that smartphone banking penetration has grown at a faster pace than overall digital banking, jumping two- to four-fold in many emerging Asian markets.
“Smartphones is the device of choice, its usage alone generate around 65 percent of all internet traffic.
“With 30 to 50 percent of those not using digital banking expressing the likelihood that they will eventually make the switch, growth in digital banking penetration is expected to accelerate in emerging Asia,” it revealed in its survey entitled “Asia’s digital banking race: Giving customers what they want”.
1. Are branches still relevant?
The firm said most governments and regulators across developed and emerging Asia are open to new digital propositions that do not jeopardise consumer protection with most consumers embracing digital banking either on their computers, smartphones, or mobiles.
“The percentage of digitally active customers (those who use digital banking at least every fortnight and have made e-commerce purchases in the last six months) has grown significantly since 2014, doubling in emerging Asia (to 25 percent of the population) and growing 1.2 times in developed Asia (to 85 percent of the population). This trend shows the increased relevance of digital channels for day-to-day customer operations,” it said.
The firm said this significant growth of digital banking has led to disruptive trends such as the declining relevance of physical bank branches and the increasing threat of new-age “pure” digital players gaining share.
This consumer-centric survey is conducted every three years.
The latest 2017 edition covered about 17,000 urban banked respondents in 15 Asian markets including Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, Myanmar, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.