Digital banking trends - 2016

Across Asia, approximately 700 million consumers are engaged in digital banking regularly, the highest being in India and China. In Malaysia it is estimated that there are 12 million such users. The main factors driving the growth of digital banking are increased sophistication in the technological ecosystem, the rise in the use of internet and mobile devices, and the growth in e- commerce. These have in turn resulted in the need for banks, which by nature tend to be conservative, to catch up with innovative products so as not to lose out. Banks should be aware that consumer spending via digital financial platforms (digital payments, online shopping etc) is expected to represent 40 percent of total spending across all generations in the coming five years. Where banks have been lacking in responding to emerging technology, telcos and fintech companies have been quick to use them to their advantage. There is already an alternative product to many facilities that have traditionally been the domain of the banks, including peer to peer payments, financing and investing.