Leading SaaS cloud banking platform Mambu has launched its annual Partner Predictions report, which highlights the top financial trends expected to influence the industry in 2023, as businesses attempt to survive and thrive in a volatile macroeconomic environment.
The report includes insightful commentary from industry leaders from across the fintech and financial services sectors, including executives from AWS, Backbase, Deloitte, Google Cloud and many more, with participants sharing their insights on the key issues that are likely to shape the financial services sector in the year ahead.
The impact of the pandemic will continue to be felt for many years to come and has been a key driver of the accelerated adoption of digital banking across Thailand and the wider Asia Pacific region. The adoption of public cloud technology in financial services has also been accelerated by the pandemic, with the rapid growth of digital banking services across the region as a direct result.
The year ahead will also see a change in focus for banks around the payments theme, with greater emphasis placed on creating their own interfaces and making them more engaging, relevant, and interesting in order to increase brand loyalty, rather than integrating their products into external platforms.
Dan Jones, Partner at Oliver Wyman Digital, said in the report: "Super-app ecosystems often include their own e-wallet offerings, such as WeChat and AliPay in China or Grab and GoTo in South East Asia. In South East Asia they are already more common than physical card payments and set to dominate POS overall. 72% of countries now have their own real-time payments (RTP) schemes and in 2023 I expect these to extend across borders. Real-time cross-border payments today are rare, via bilateral links such as Singapore's PayNow and each of Thailand, Malaysia, India, and the Philippines. However, multilateral agreements are coming. ASEAN central bank governors have signed an agreement for a true cross-border system using QR codes."
Pham Quang Minh, General Manager of Mambu Thailand: "2023 will certainly be a promising year for Thailand's financial landscape. While some of Mambu's predictions made in last year's report, such as embedded finance or digital payments, will still have our attention, this upcoming year's spotlight will be on digital banks, which are expected to be fully licensed and start operating throughout 2023. We are looking forward to seeing how innovation can make financial services simpler, more inclusive and accessible for everyone."
Other trends and issues expected to have a significant impact on the Asia Pacific financial services industry include:
- Low code / no code: This approach will drive faster speed to market for new digital banking products and services by empowering business teams to quickly protoype and launch without the need for complex development processes and specialised coding skill sets.
- Big tech in banking: Already many big tech companies have moved into banking in Asia, with institutions like Grab, AEON, and the SEA Group all now part of conglomerates holding digital banking licences. This move by big tech will force banks to drive more effective digital transformation - customers now have higher expectations for their digital experiences, so traditional banks need to partner with technology providers to offer more competitive banking services.
- ESG and ethical impact finance: We will see a shift towards ESG across Asia Pacific, which will not only drive traditional banks towards more inclusive composable financial products and services, but also keep sustainability in mind for the benefit of their customers. In Asia, Islamic banks will see growing interest from potential customers outside of the Muslim faith who have a keen interest in ethical finance.
- Data unlocking growth: More than 90% of all data generated with banks will be actionable in real time using machine learning by the end of 2025, according to Google Cloud. Financial institutions will re-imagine themselves as "data companies with a banking license" to access previously locked innovation opportunities such as one-hour home loan, green lending products, frictionless onboarding and ultra-flexible, customer-centric products.
Fernando Zandona, Chief Technology and Product Officer of Mambu concluded: "The financial landscape has been extremely turbulent for some time. Economic uncertainty, big tech companies redefining the financial services space, fintechs looking to be more nimble and efficient, banks looking to reinvent themselves, there is a lot going on. But no matter what, it is going to be the end customers who decide which players win and continue in the market, and these customers will favour those who move fast and innovate. Embracing technology will be one of the top approaches that financial services will need to survive and thrive."
The full list of the predicted trends for 2023 has been released on Mambu's website. To download the full report visit: https://mambu.com/insights/articles/trend-alert-the-forces-shaping-finance-in-2023