The Transformative Journey of Digital Banking in APAC: Growth, Challenges, and Innovations
Kris Emerton-Jones
Introduction
In the last five years, the Asia-Pacific (APAC) region has experienced a remarkable transformation in the banking sector, driven by the surge of digital banking. This growth reflects the region’s rapid adoption of technology and the evolving demands of its increasingly digital-savvy population. “65% of APAC customers now prefer to use digital channels to engage with their bank.”
The Growth of Digital Banking in APAC
Digital banking in APAC has witnessed exponential growth over the past half-decade due to several contributing factors. The proliferation of smartphones and affordable internet access has empowered more people to embrace digital banking. Fintech innovations, driven by startups and established financial institutions, continually develop new technologies to cater to the evolving needs of customers. Additionally, governments and regulatory bodies in the region have been proactive in creating favorable environments for digital banking. “Regulators across APAC are actively issuing digital banking licences to promote financial inclusion and competition.” Furthermore, the modern consumer’s preference for convenience, speed, and personalized services has driven banks to adopt digital risk solutions that enable instant decisioning.
Customer Onboarding Challenges and Friction
Despite the impressive growth, digital banking faces significant challenges in customer onboarding, a critical phase where potential customers form their first impressions of the bank. Stringent Know Your Customer (KYC) requirements can make the process cumbersome and time-consuming, and . Many customers, especially in rural areas, face difficulties due to limited access to high-speed internet and digital literacy issues. A complicated or non-intuitive onboarding process can deter potential customers, and concerns about data privacy and security can lead to mistrust and abandonment.
Mitigating Friction in Customer Onboarding
To address these challenges, digital banks in APAC are implementing various strategies. They are streamlining KYC processes by utilizing advanced technologies like AI and machine learning to automate and simplify fraud and identity management. Additionally, they are enhancing user interfaces to create intuitive and user-friendly designs that guide customers seamlessly through the onboarding process. Robust customer support, including chatbots and live assistance, is provided to help users navigate technical issues. Furthermore, banks are conducting digital literacy programs to help customers understand and effectively use digital banking services.
Risk Decisioning
Effective risk decisioning is crucial for digital banks to mitigate lending fraud and ensure compliance while delivering a seamless customer experience. Credit risk management software plays a vital role by processing vast amounts of data in real-time, allowing banks to make quick, informed risk decisions, and using AI and machine learning provides predictive insights to accurately assess customer risk profiles. It’s imperative to look for a flexible and scalable solution to cater to the diverse needs of APAC banks, ensuring adherence to local and international regulatory requirements.
Conclusion
The recent growth in the digital banking sector in APAC showcases its potential. To sustain this growth, banks must improve customer onboarding and risk decisioning with innovative technology solutions that can streamline onboarding, reduce friction, and enhance risk decisions. Banks that prioritize advanced technology, frictionless customer experience, and more effective risk management will lead the future of banking in APAC.
Discover how we can help your digital banking strategy.
One Decisioning Platform for Every Customer Touchpoint
Balancing risk with opportunity can be a challenge – especially when you need to offer your customers real-time, personalized products and services. Discover how Provenir allows you to minimize risk, maximize value, and streamline engagement across the customer lifecycle – all from a single decision intelligence platform.
Do you struggle to maintain your legacy risk decisioning solutions? A lack of support from current vendors, evolving compliance regulations, increased competition and a need for digital transformation can all mean that the time has come to upgrade your outdated legacy technology. But upgrading can be overwhelming, and poses its own challenges, especially as you decouple your decisioning platform from other systems and integrations.
So what do you need to consider when it’s time to move? Check out our comprehensive list of considerations for a successful tech migration.
Want to learn more about our years of experience with large-scale migrations?
With extraordinary growth over the past twenty years, the financial services sector has seen incredible tech advancements that have changed the way products and services are developed and offered to customers. And Provenir has been along for the ride. We’re looking back at two decades of evolution and what’s next for innovation in risk decisioning.
Discover more about Provenir’s cutting-edge risk decisioning solutions.
In today’s fast-paced and competitive financial landscape, both digital and traditional banks are continuously seeking innovative ways to enhance their customer onboarding process. Consumers today demand speed and ease in every online interaction. Providing a safe and low-friction experience throughout the entire client lifecycle—from onboarding to log-in to transactions—is crucial to building, growing, and retaining your customer base. This webinar delves into the transformative power of technology in reshaping the customer journey, equipping financial institutions to emerge as forward-thinking powerhouses.
Join us live on July 10th for your chance to gain the knowledge and tools needed to transform your customer onboarding process, drive growth, and stay competitive in the modern financial landscape.
Key Highlights:
Leveraging technology to personalize customer interactions and tailor services to meet individual needs, enhance satisfaction, and improve loyalty.
Discover strategies to enhance customer experiences while fortifying fraud and identity management across the client lifecycle.
How to integrate intelligent systems into existing operations and navigate the challenges of legacy systems.
How to better leverage enriched data and machine learning to gain more insights across the client lifecycle.
The reasons why building dynamic workflows that incorporate identity, device, and behavioural data is essential to improving risk decisioning and, ultimately, creating a better customer experience
Embrace the future of banking with a customer onboarding process that sets you apart from the competition. Don’t miss this opportunity to learn from industry experts and network with peers who are also on the path to digital transformation.
Transforming Consumer Lending: How Big Retailers Like Walmart Are Changing the Game
Exploring the Future of BNPL and Embedded Finance in Retail Through Innovation and Advanced Technology
The world of consumer lending has undergone significant change in recent years, and at the forefront of this evolution are big retailers like Walmart and Target. In adopting innovative lending solutions, retail giants are not only enhancing their business models but also setting new industry standards when it comes to consumer lending and technology. Tech plays a significant role in reshaping consumer lending, and strategic integration of tech for things like Buy Now, Pay Later (BNPL) and embedded financing will be key to the continued success of these corporate brands. So what are the specifics of how these global corporations are changing the shape of the industry? Read on for more details.
Walmart’s BNPL Initiative:
Walmart’s integration of the BNPL program through One has dramatically reshaped consumer financing for the retailer. Their program allows customers to make purchases and pay over time with minimal hassle, significantly boosting customer engagement and sales. The flexibility offered by BNPL has made big-ticket items more accessible, and the ease of integrating it into their own systems has driven substantial growth, setting a benchmark for retailer-led lending solutions.
Amazon’s Consumer Lending Programs:
Already the gold standard for online shopping, Amazon has further shifted how consumers approach online shopping with their installment payment options. By providing flexible payment terms, Amazon is able to significantly enhance customer satisfaction and loyalty. This approach underscores the impact of tailored lending solutions in driving business growth, highlighting the potential for other retailers to adopt similar models.
Target’s Financial Services:
U.S. darling Target has seamlessly integrated consumer lending into their business model, making credit more accessible to more customers. This strategy has not only driven sales but also strengthened customer relationships, illustrating the benefits of embedding lending solutions within the retail experience, and paving the way for other retailers to follow suit.
Overcoming Tech Integration Challenges and Ensuring a Seamless Experience
Retailers face several technological challenges, including data security, system compatibility, and fraud screening. Successfully navigating these challenges requires strategic planning and investment in advanced technology. Risk decisioning solutions can play a crucial role in ensuring these integrations are smooth and secure, providing a solid foundation for innovative lending programs.
Beyond the tech itself, a seamless customer experience is vital for the success of retailer-led lending (or any lending at all). This involves intuitive interfaces, quick approval processes, personalized offers, and transparent communication. Strategic technology partnerships are essential to achieving these goals, enhancing the overall customer journey and fostering long-term customer loyalty.
But with the influx of customers and customer activity comes the data. Protecting consumer data is paramount. Not only does implementing stringent security measures build trust and loyalty among customers, but also ensures compliance with various regulatory requirements. An advanced, cloud-based risk decisioning engine can provide robust data security, safeguarding consumer information and reinforcing trust.
Educating the Consumer
Retailer-led lending offers unparalleled convenience and accessibility, but educating consumers about these benefits is crucial in helping them make informed decisions and enhancing their financial well-being. Providing clear, transparent information about lending options can empower consumers and drive adoption. Make sure consumers are aware of potential risks, such as overspending and missed payments and ensure your risk strategy is promoting responsible lending practices. Promoting financial literacy through consumer education initiatives is essential – invest in resources that explain your lending programs, helping consumers understand and use these services responsibly. This not only enhances customer satisfaction but also fosters long-term loyalty.
Navigating the Regulatory Landscape and Future Trends in Lending
As with all lending, retailer-led lending is subject to various regulations, including consumer protection laws and data privacy requirements. Staying informed and compliant is critical to avoiding legal issues. And this is where leveraging risk decisioning solutions can help retailers navigate regulatory complexities and ensure adherence to all compliance requirements, especially as they evolve (which they always do). With the regulatory environment continuously changing, retailers must stay ahead of potential changes by actively participating in industry discussions and advocating for favorable regulations. Monitoring regulatory trends and adapting strategies accordingly are also key to long-term success.
The market for retailer-led lending continues to grow, with key trends including the rise of BNPL services, increased use of AI in credit and fraud risk decisioning, and expansion beyond traditional credit. These trends highlight the importance of innovative approaches and the potential for significant growth in this sector. Retailers also have numerous opportunities to tap into underserved segments, offer flexible payment options, and use data analytics to improve customer targeting. However, they must also navigate challenges such as increasing competition and regulatory scrutiny. Staying agile and adapting to changing conditions will be crucial for success (and again, this is where an integrated, holistic approach to risk decisioning can help immensely – allowing you to stay flexible and evolve with the market and consumer demands).
AI and machine learning will continue to impact all forms of consumer lending, enabling smarter credit decisions, better fraud detection, and personalized lending offers. These technologies provide opportunities for retailers to innovate and enhance their offerings, improving the customer experience while ensuring adequate risk mitigation. Embracing innovative practices such as dynamic pricing and real-time credit scoring will further enhance the customer experience and drive business success, setting new standards for the industry.
What Does the Future Look Like?
The future of retailer-led consumer lending is bright. With ongoing technological advancements and growing consumer demand for personalized, flexible payment options, big retailers are poised to lead the next wave of financial innovation. You just need the right tools to help you navigate these evolving demands successfully and ensure you can efficiently and effectively leverage technology, prioritize consumer education and experience, and navigate regulatory challenges.
What do those tools look like? Look for technology solutions that:
Ensure you can make accurate lending decisions in real-time: With the right data (including traditional and alternative) integrated directly into your decisioning engine, you can enable more accurate fraud orchestration and credit risk decisions and streamline onboarding for customers and new merchants alike
Allow you to easily adapt to regulatory changes and market evolution: Look for the ability to rapidly adjust risk strategies or launch new products with risk decisioning software that features a low-code, drag-and-drop UI to ensure self-sufficiency for business users (and avoid waiting on IT and vendors)
Encourage financial inclusion: BNPL is often about helping the underserved and underbanked get access to credit-like products, even without a robust credit history. Make sure your solutions offer streamlined data orchestration and embedded intelligence for accurate approvals even for those with thin-file credit history
Enable sustainable profitability and growth: Make sure your solutions optimize your lending strategies, fraud screening, and risk decisioning processes, so you can reduce bad rates, maximize customer lifetime value, and enable sustainable business growth.
This leading Buy Now, Pay Later provider struggled with flexibility and speed of accepting and processing applications, but with intelligent risk decisioning solutions from Provenir, they were able to improve their agility and can now make accurate decisions in real-time. Discover how.
For more in-depth information on using BNPL to ensure profitability, check out our eBook
Provenir Wins ‘Best Technology Provider – Risk Decisioning’ in the 2024 Credit Strategy Credit Awards
Parsippany, NJ – June 19, 2024 – Provenir, a global leader in AI-powered risk decisioning software, today announced it has been named winner of the “Best Technology Provider – Risk Decisioning” category in the 2024 Credit Strategy Credit Awards.
The Credit Strategy Credit Awards recognize and celebrate innovation, best practices, and those setting new standards in the credit and financial services industries. Winners were announced at an awards ceremony June 18 at The Celtic Manor Resort in Wales.
“This is a tremendous honor for the Provenir team, recognizing their hard work and ingenuity in redefining risk decisioning for modern financial services organizations. Our AI-Powered Decisioning platform delivers efficient automation and data orchestration that adapts to the needs of organizations, enabling them to build customer trust and reduce risk with compliant and secure processes.”
Provenir’s AI-Powered Decisioning platform incorporates four intelligent decisioning solutions – credit risk onboarding, customer management, collections, and fraud & identity – across the lifecycle in a single platform. With holistic end-to-end decisioning, the platform eliminates the need to integrate multiple platforms by providing cohesive, loyalty-building experiences across the customer journey that minimize risk and maximize customer lifetime value.
See all the awards Provenir has won over the years
Elevating Customer Experiences: Headless Banking and Banking-as-a-Service (BaaS)
How to enhance engagement and streamline services with innovative banking models
The global Banking-as-a-Service (BaaS) market size is expected to reach USD $14.72 billion by 2029, thanks to elevated customer experiences, maximum flexibility and agility, and overall cost and operational efficiency. How are headless banking and BaaS transforming the way financial services are developed, delivered, and consumed by increasingly digitally-savvy consumers? Check out the infographic for more.
Want more in-depth info on how headless banking and BaaS are transforming financial services?
Three easy ways to boost access to credit (and skyrocket operational efficiency)
Unleash the power of Equifax alternative data and AI-powered credit risk decisioning from Provenir
There’s a lot of pressure for today’s financial services providers, as consumer debt (and delinquency rates) continue to rise. So how can you ensure easier access to credit for your creditworthy customers? In this blog from our Data Marketplace partner Equifax, they highlight how to boost operational efficiency with the one-two punch of Equifax data and Provenir’s AI-powered decisioning platform.
In today’s digital economy, customers demand secure and smooth online transactions, while businesses struggle to prevent fraud without disrupting user experience. Listen to our panel discussion with data science, fraud, and product professionals from Mastercard, Sun Finance, and Provenir as we explore how financial services organisations can strike the balance between fraud screening and customer experience strategies while staying compliant with EU regulations. In our webinar, we discuss:
How to better leverage enriched data and machine learning to gain more insights across the customer journey and lifecycle
How to protect against synthetic identities at account opening as well as account takeovers and modifications, without impacting onboarding for good customers
The importance of breaking down organisational siloes and barriers when it comes to data sharing and decisions made on fraud prevention
Why building dynamic workflows that incorporate identity, device, and behavioural data is essential to improving risk decisioning and customer experience
