Breaking Traditions

Asia remains the fastest growing region globally despite slower-than-expected growth in major industrial countries. As key economies in the region, such as China, move ahead with structural reforms and transition to a more sustainable long-term growth model; there is now renewed focus on ASEAN as an engine of future growth.With an aggregate growth that is one of the fastest in the world, a young and increasingly technological exposed population and becoming more middle-class and urbanised, ASEAN is a formidable market for the expansion of financial services. The potential of the region is nowhere better represented than one of its rising stars, Vietnam.

A key pillar of ASEAN Economic Community (AEC) is the ASEAN Banking Integration Framework which will see the creation of an integrated financial market in the region by 2020. Integration brings competition. It increases productivity, efficiency and enlarge the overall pie for everyone as the attendant transfer of knowledge and technology spurs growth, creating new jobs, especially in skilled services, and income in turn swelling the consumption base. A virtuous cycle, proponents will argue.

In Vietnam, the State Bank of Vietnam is looking to reduce the fragmentation of the industry by encouraging consolidation and reducing the number of commercial banks to 20 by 2017. This spells enormous opportunities for companies looking to tap into the future growth of the industry by regionalising their businesses through mergers and acquisitions. This reflects similar policies in the other ASEAN members.

As we look to the future of the financial industry, the special position of trust and confidence that banks once hold is being eroded day by day. That is because banks and bankers have been slow to see the future of finance than others, from imagining the role of virtual currency to how they can support corporates in the new way that value and supply chains are being formed. In fact the rules of the games have been rewritten by new challengers like Fintechs and disruptors, before their very eyes, who see not from the eyes of banks or regulators but the eyes of the customers.

The increasing adoption of digital and mobile technology has helped to transform the entire experience of how service providers deal with customers. The innovators of today are focused not just on individual break throughs but on the entire customer experience. By transforming business processes to ensure a seamless, intuitive and simple experience, they are revolutionising services while making banking products and services more accessible to more people, even those considered unbankable by traditional banks.

The Asian Banker will hold its flagship Summit in Hanoi, Vietnam, in 2016. The region, through its rapid structural reforms, and home to untapped natural and human resource, is poised to become the next hub of financial investment, trade inflows, supply-chain networks and infrastructure development.