Competition in the Asia-Pacific region is intensifying between established financial institutions and the technology and e-commerce disruptors that threaten to carve up the payment solutions market. According to a report by Temenos, BigTech companies like Google, Facebook and Apple as well as major payment players like WeChat Pay, Alipay and PayPal are viewed as the biggest threat by established financial institutions in the region (60%), followed by neo-banks like Volt Bank, Varo Money and Monzo (25%). With these treats in mind, established financial institutions in the region are starting to see mastering digital marketing and enhancing digital engagement as their top strategic priority.
The report also found that emerging regulations in areas such as data protection and digital taxation will have a significant impact on the banking sector, although this is likely to vary by country as each country is being driven by different players. In Australia for example, the government is driving initiatives to increase competition within established regulatory frameworks. In other parts of the region (e.g. Singapore) however, players themselves are driving initiatives as a way to remain competitive. In China, tighter licensing and data protection rules are set to diminish the power of Alipay and WeChat Pay’s duopoly.