Understanding How Asian Banks are Dealing with Digital Disruption

Asian banks are grappling with digital disruption. Photo credit: ADB.
Asian banks are grappling with digital disruption. Photo credit: ADB.

One of the strategies being used to transition to digital banking is to expand the customer base beyond people who use traditional banks.


Asia is digital. For example, more than one billion Aadhaar* ID cards have been issued in India; the Internet populations of the People's Republic of China and India together outnumber the entire population of the United States. A modular Asian financial-services industry is rapidly emerging, driven by, and as a response to, digital trends. Yet, while technology has displaced incumbents in many industries, for Asian banks, disruption to business models is more likely than displacement.

The potential digital disruption has several possible outcomes. Banks could prevail by embracing change, or new banks could emerge. Incumbents could transform to survive, or the whole banking system could be upended with different players assuming specialist roles across the value chain.

As Asian central banks promote inclusive growth and push to digitize economies (such as the push for demonetization in India and a cashless economy in Thailand), regulators are looking to new, open and innovative financial systems that could change the business models of banks and marginalize them as balance-sheet players.

What strategies have Asian banks pursued to counteract this digital disruption?

Asian banks flirted with a number of strategies in the first era of digital banking (circa 2012-2016). Most strategies had common threads: the focus was on digital natives (roughly 10 percent of the total bankable population); growth or defense was the primary motive given the perceived threat from fintech players. Transaction banking was the primary focus, but it was largely gilded with a digital veneer.

* Aadhaar is a 12-digit unique identification number issued by the Indian government to its residents
This report was adapted from content featured in BRINK Asia.

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Meet the experts

  • Duncan Woods    
    Partner, Retail & Business Banking Practice, Asia Pacific, Oliver Wyman

    Prior to joining Oliver Wyman, Duncan Woods worked for Standard Chartered Bank, Deutsche Bank, and McKinsey. He has a BA in Economics from Cambridge University, an MSc in Economics from University College London, and spent a year at Harvard Graduate School of Arts & Science on a Kennedy Scholarship.

  • Bharath Sattanathan    
    Principal in Oliver Wyman, Singapore

    Bharath Sattanathan is a principal in Oliver Wyman’s Singapore office. He is a member of Oliver Wyman’s Retail and Business Banking practice in the Asia Pacific Region (APR) and a part of the APR Digital platform responsible for Digital Strategy and Acceleration. Prior to joining Oliver Wyman in 2016, Bharath was a Director at Accenture Strategy, where he was responsible for the Digital Strategy practice focused on financial services in the region.

   Finance sector development, Information and communication technology
   Last updated: February 2017



The views expressed in these articles are those of the authors and do not necessarily reflect the views of the Asian Development Bank, its management, its Board of Directors, or its members.

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