INSIGHT

Using Digital Technology to Reach the Unbanked in Southeast Asia

A study of four countries in Southeast Asia (Cambodia, Indonesia, Myanmar and the Philippines) shows only 18% of adults use a bank account to receive wages or pay utility bills. Photo credit: ADB.
A study of four countries in Southeast Asia (Cambodia, Indonesia, Myanmar and the Philippines) shows only 18% of adults use a bank account to receive wages or pay utility bills. Photo credit: ADB.

A study of four Southeast Asian markets examines how digital financial solutions can play a key role in closing gaps in financial inclusion.

Introduction

Worldwide bank account ownership rocketed by 700 million between 2011 and 2014, and as of 2014, 62 percent of adults globally reported having a bank account with a formal financial institution. This represents significant success in extending access to formal financial services. However, promoting the use of formal financial services continues to be a challenge across developing economies (including a number of ASEAN markets), and the depth of engagement varies with different financial products.

For example, a recent Asian Development Bank study of four Southeast Asian markets shows that only 18% of adults use a bank account to receive wages or pay utility bills, and only 11% borrow from formal sources.

Conducted by Oliver Wyman and Microsave, the study, which is focused on financial inclusion, finds that digital financial solutions can play a significant role in closing these gaps in financial inclusion by promoting regular use of various financial services products. Digital applications can address 40% of the volume of unmet demand for payment services and 20% of unmet credit needs in the “Base of Pyramid” and the micro, small, and medium enterprise (MSMEs) segments, according to the study, which assesses the impact of digital finance in Cambodia, Indonesia, Myanmar and the Philippines.

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.

  • Ritwik Ghosh    
    Principal, Retail and Business Banking Practice, Asia Pacific, Oliver Wyman

    Ritwik Ghosh has 12-plus years of financial services industry and consulting experience across emerging markets, including Southeast Asia, South Asia, and Africa. He is an expert in retail and small- and medium-sized enterprises banking strategy development, sales productivity enhancement and customer analytics.

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

 




Disclaimer

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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