CFOtech Australia logo
Technology news for Australian CFOs and financial decision-makers
Story image

Report: 63% of APAC customers willing to switch to neobanks

By Nick Forrester
Mon 18 May 2020
FYI, this story is more than a year old

The era of digital banking is well underway in the Asia Pacific (APAC) region, and is set to accelerate in the next five years, with 63% of customers willing to switch to neobanks and challenger banks between now and 2025.

That’s according to a joint report released today by IDC and Backbase, which also found that APAC is expected to see an explosion in new financial institutions in the same time period as new banking licenses are issued and markets become increasingly liberalised.
 
The research was made through review of 55 banks, 20 challenger banks and 40 fintech disrupters in markets throughout APAC.

Data from the report shows that the rise of digital banking can be partially attributed to the conservative view of the value chain maintained by many traditional banks – leaving them unable to take advantage of potential ecosystem partners.

80% of the top 250 banks in APAC still prefer to own the entire value chain of banking, with third party-contributed business at a mere 2%.

Meanwhile, more than 35 neobanks or new digital challengers across APAC are built on modern technology foundations following agile best practices, giving them an edge over traditional models when it comes to self-service capabilities, customer needs, personalisation and more.

The combination of these factors means that 38% traditional banks’ revenues could be at risk in the next five years, according to the report.

In Australia, established banks will seek to reverse recent erosion in cost-to-income ratios in part using open API platforms. 

These platforms not only promote internal agility and efficiency but also enable third-party partners and fintech capabilities to be integrated into seamless digital customer journeys across all channels. 

These changes should also delight customers, as a significant majority (70%) of APAC banking customers continue to view banking processes as tedious.
 
Having said this, it is expected that the ‘big four’ Australian banks (ANZ, Westpac, Commonwealth Bank, and NAB) will maintain their dominance through 2025, the report says, as small and mid-tier banks continue to be challenged by legacy systems, competition for digital talent, and lack of experience in executing large-scale digital transformation. 

“From a digital banking perspective, the rapidly unfolding pandemic will have a profound and enduring effect in Australia,” says Backbase regional director for A/NZ Malcolm Macnaughtan.

“Transforming to a digital-first business will be key to survive the persistent challenging conditions. 

“Increased customer adoption of digital together with the launch of open banking present significant opportunities for banks with the capabilities to adapt,” says Macnaughtan.

“Incumbent banks and new challengers in Australia must innovate at a rapid pace to emerge on top in the race to be digital-first.”

Research from the study also suggests that the success of future banks will depend largely on customer experience (CX), unlocking personalisation at scale, and embracing emerging technology – especially artificial intelligence (AI).

In fact, by 2025 44% of the top 250 banks across APAC will complete their ‘connected core’ transformation — working on platform-based and componentized modernisation, and API-enablement. 

At the same time, 48% of banks in APAC are also expected to leverage AI or machine learning (ML) technologies for data-driven decisions.

Specifically in Australia, revenue is expected to increase by 15% through the heightened use of AI for customer management.

Prediction of customer behaviour and better usage of customer data is the key to unlocking new revenue streams, the report says, by bringing banks into the realm of ‘smart banking’ and subsequently becoming a more active part of the customer’s decision-making process.
 
“Being digital-first calls for the integration of digital technologies with the comprehensive transformation of business processes, engagement strategies, channels, and business models of banking,” says IDC Financial Insights associate vice-president of APAC Michael Araneta.

“With the insights from the report, banks and neobanks can be well-positioned for the future.”

Related stories
Top stories
Story image
Digital wallets
NFTs are ready to disrupt the ticketing world
The last few months have seen NFTs wielded by digital creators to take ownership over their craft and content. Now other industries are beginning to understand the real-world value that these nifty decentralised tokens can provide.
Story image
Artificial Intelligence
Juniper study reveals top AI trends in APAC region
Juniper's research shows an increase in enterprise artificial intelligence adoption over the last 12 months is yielding tangible benefits to organisations.
Story image
Infrastructure
New VMware offerings improve cloud infrastructure management
VMware has unveiled VMware vSphere+ and VMware vSAN+ to help organisations bring benefits of the cloud to existing on-prem infrastructure.
Story image
Fintech
Corpay announces new collaboration with Triterras
Corpay and fintech firm Triterras have announced a new collaboration between Corpay’s Cross-Border business and Triterras Inc.    
Story image
DNS
DigiCert acquires DNS Made Easy and affiliated brands
Greg Clark comments, says, "This combination enhances the security of certificate validation and enables the automation of future validations."
Story image
NaaS
Survey finds 94% of Australian IT leaders looking at NaaS
Aruba’s latest survey reveals a rising interest in NaaS among Australian technology leaders as they re-evaluate their current infrastructure and network setup.
Story image
Market growth
Salesforce unveils new offerings for consumer goods companies
Salesforce has announced new products for consumer goods companies to help brands navigate increasing market complexity more easily.
Story image
Robotic Process Automation / RPA
Salesforce announces latest generation of MuleSoft
Salesforce has introduced the next generation of MuleSoft, a unified solution for automation, integration and APIs to automate any workflow.
Story image
Dicker Data
EXCLUSIVE: Why women in IT makes good business sense - Dicker Data
The Federal government wants to bolster female participation in the tech industry to at least 40% by 2030. Here's how one homegrown Australian company has already reached that goal.
Story image
BitTitan
How to achieve your monthly recurring revenue goals
Monthly recurring revenue (MRR) is the ultimate goal, the most important issue on which anyone in the IT channel should focus.
Story image
Hybrid workforce
How organisations can prepare for a post-pandemic workforce
The so-called 'new normal' office looks different to how it did pre-pandemic, and organisations need to take steps to better manage their post-pandemic workforce. 
Story image
Citrix
The best ways to attract young talent during labour shortages
New research from Citrix reveals hybrid working and ventures into the metaverse are top of mind for Gen Z workers.
Story image
Airwallex
How Airwallex helps businesses achieve globalisation success
As markets continue to shift, businesses need to be able to provide the same quality of service for customers regardless of where they are located around the world.
Story image
Microsoft
TO THE NEW unveils A/NZ Managed Services for Microsoft Azure
TO THE NEW has released Managed Services for Microsoft Azure to meet the growing demand in the A/NZ market and globally.
Story image
Hybrid workforce
Why hybrid working is here to stay and how to ace it
Citrix's new report reveals hybrid workers are more productive and engaged at work than their office and completely remote counterparts.
Story image
3D Printing
Fleet Space, Konica Minolta partner for 3D printer offering
Fleet Space has partnered with Konica Minolta to implement 3D printers from 3D Systems to support the commercial small satellite manufacturer’s offerings.
Story image
Cybersecurity
Vulnerable APIs costing businesses billions every year
Large companies are particularly vulnerable to the security risks associated with exposed or unprotected APIs as they accelerate digital transformation.  
Story image
Cloudera
Overcoming hybrid and multi-cloud challenges to drive innovation
Driven by improvements in technology, financial services companies have advanced both internal and external systems and processes, with the likes of digitisation, personalisation and risk management redefining the industry.
Story image
Tech job moves
Tech job moves - ActiveCampaign, Arcserve, LogRhythm & Qlik
We round up all job appointments from June 17-22, 2022, in one place to keep you updated with the latest from across the tech industries.
Story image
Cybersecurity
Video: 10 Minute IT Jams - An update from CrowdStrike
Scott Jarkoff joins us today to discuss current trends in the cyber threat landscape, and the reporting work CrowdStrike is doing to prevent further cyber harm.
Productivity
Discover the 5 ways your ERP may be letting you down. Is your current system outdated, difficult to manage, and costing you a fortune?
Link image
Story image
Wiise
Four things wholesale distributors need to consider for FY2023
In a post-pandemic world, there are many things for a distribution business to juggle. ERP solutions company Wiise narrows down what companies should focus on.
Digital Transformation
Discover the 5 signs your business is ready for a cloud-based ERP. Is your business being left behind as more of your competitors switch to the cloud?
Link image
Story image
Artificial Intelligence
Accenture shares the benefits of supply chain visibility
It's clear that gaining better visibility into the supply chain will help organisations avoid excess costs, inefficiencies, and complexity to ultimately improve their bottom line.
Story image
API
Industry-first comprehensive risk-based API security enhances protection
Application Programming Interfaces (APIs) have become a crucial part of operating web and mobile application businesses and are causing significant economic growth in the digital sector.
Story image
Payroll
How New South Wales state departments achieved cloud migration success
State departments in New South Wales are heading to the cloud to achieve better workflow solutions, and one company is paving the way for their success.
Story image
Digital Transformation
What CISOs think about cyber security, visibility and cloud
Seeking to uncover the minds of CISOs and CIOs across Asia Pacific, my company recently asked Frost & Sullivan to take a snapshot of cloud adoption behaviour in the region.
The Access Group
Increasing headcount isn't always the best way to grow. A good financial strategy can help solve many issues, and The Access Group shares the secret to success.
Link image
Story image
Civil Defence
OutSystems platform chosen as part of ADF contract
"To be included in this project is a reflection of our ability to deliver secure, modern digital outcomes for defence at an incredible pace."
Story image
Accounting
One in five Aussies never reimbursed for work expenses
A new survey has exposed Australian employee job dissatisfaction, with many being left out of pocket for work expenses. 
Story image
Samsung
Monitors are an excellent incentive for getting employees back
The pandemic has taught us that hybrid working is a lot easier than we would’ve thought, so how can the office be made to feel as comfortable as home? The answer could be staring you in the face right now.
Story image
Digital Transformation
Stax and Consegna partner to accelerate modernisation
According to a statement, the new alliance will help both companies expand their reach across the region and realise joint goals.
The Access Group
Struggling to understand which transformative technologies will help your business? The Access Group provides a look into key opportunities and impacts for finance.
Link image
Story image
Sustainability
Honeywell launches new carbon energy management software for buildings
The new Carbon & Energy Management service allows building owners to track and optimise energy performance against carbon reduction goals, down to a device or asset level.
Supply chain
Discover the 4 critical priorities for wholesale distribution businesses in FY23. Are you worried about how supply chain issues may affect your business in 2023?
Link image
Story image
Data ownership
Brands must reclaim trust by empowering data ownership
According to Twilio's new State of Personalisation Report 2022, 62% of consumers expect personalisation from brands, and yet only 40% trust brands to use their data responsibly and keep it safe.
Project management
Discover the 4 crucial factors for choosing the right job-costing solution. Is your team struggling to cost jobs and keep projects running on budget?
Link image
Story image
Consumer
Adobe survey reveals link between brand trust and consumer buy-in
Adobe has announced results from a study, which finds a strong correlation between brand trust and consumer behaviour.
Story image
Digital Transformation
Google Cloud launches new Digital Accelerator bundles for Aussie SMBs
The new bundles are designed to help Australian small and medium-sized businesses embrace digital transformation and take their businesses online.
Story image
Shouta
The rise of digital gifting in the workplace
The name itself does most of the explaining; it’s a gift you receive virtually. But a misconception about digital gifts is that they need to be redeemed virtually as well. 
The Access Group
Health and social care organisations are currently under significant financial pressure. Find out how financial transformation can help provide an effective route forward.
Link image
Story image
Enterprise Resource Planning / ERP
Five ways your ERP is letting you down and why its time for a change
Wiise explains while moving to a new system may seem daunting, the truth is that legacy systems could be holding your business back.
Story image
Testing
Video: 10 Minute IT Jams - An update from Tricentis
Tricentis provides software testing automation, and software quality assurance products for enterprise software.
Story image
Contact Centre
Customer service agents don't want to return to contact centres
A new report has revealed that 85% of customer service agents want to work full-time at home and not return to contact centre offices.