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