A report by Frost and Sullivan revealed that fintech solutions and services in the Asia Pacific (APAC) region is expected to amount to more than US$70 billion in revenue by 2020, with a Compound Annual Growth Rate (CAGR) of 72.5 percent.
Singapore, Hong Kong, and Sydney are dubbed the innovation hubs of the region, because of favourable government regulations, the startup ecosystems, and the 18-34 demographic group which drives the consumer demand.
In Singapore, the support for the banking industry in 2016 by the Monetary Authority of Singapore (MAS) has been immense -- "from the launch of the regulatory sandbox, to the Singapore Fintech Festival, to the trial of MyInfo for hassle-free bank account opening," noted Pranav Seth, Head of E-Business and Business Transformation, OCBC.
With the start of a new year, let us take a look at the notable trends in the banking industry last year, as well as the trends and innovations to look out for in 2017.
Embracing automation and innovation
With the influx of fintech startups in 2016, "people are becoming more aware about various fintech offerings. [They are also beginning to] acknowledge that fintech startups are not here to disrupt the banking industry, but can instead help to accelerate innovation," Seth explained. "For Singapore to become a Smart Financial Centre, we require a concerted effort by the entire ecosystem to commit to this digital transformation."
As the focus of the workflow transformation shifts toward innovation, "Robotic Process Automation (RPA), which allows the automation of repetitious and labour-intensive work, has seen a step-change in adoption with many financial institutions (FIs) developing pilots, and many actually implementing them in production," according to Liew Nam Soon, EY Asean Managing Partner, Financial Services, Ernst & Young Solutions LLP.
The advantages include the low deployment costs, and associated increase in efficiency and enhanced quality. This makes the business case for RPA stronger and much easier to justify, as compared to large-scale core platform replacements.
"FIs are also focusing on cyber threat intelligence as an advanced process that enables an organisation to continually gather valuable insights based on the analysis of contextual and situational risks and can be tailored to the organisation's specific threat landscape, its industry and markets. Rapid advances in [cybersecurity] technology are transforming the ability of organisations to better collect, analyse, and use information as never before."
Collaborative innovation with startups to be at the heart of digital future for banks in 2017
In 2017, "we are anticipating more interest by banks in developing a data-driven customer strategy. With data and analytics, banks can rely on insights from both internal and external data to strategise the best way to create differentiated offerings and/or products for competitive advantage," said Lyon Poh, Head of Digital + Innovation, KPMG Singapore.
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