Financial services sector to benefit from Southeast Asia and Taiwan 4.3% GDP growth amidst COVID-19
Apr 23, 2020
April 24, 2020 - SINGAPORE: Despite the numerous economic challenges the region is facing in 2020, the digital financial services industry is in an extremely strong position to offer highly relevant products which sufficiently meets the social and physical restrictions enforced on most of the population. Southeast Asia (SEA) and Taiwan (TW) will continue to experience GDP growth beyond global averages – SEA and TW 2019-2023 compound annual growth rate (CAGR) 4.3%, while the global average is at 3.2% CAGR.
IDC Financial Insights’ latest report titled Southeast Asia and Taiwan – Digital Financial Services Are Rapidly Rising looks at the current state of financial services, the ways that digital financial services can help resolve them and analyzes the current market sizing and potential for these solutions.
“As a region, SEA and Taiwan TW have numerous key issues in the financial services landscape – high unbanked populations and low penetration of traditional financial products – marking it as an ideal growth field for digital financial services. eWallets, digital lending, insurtech, and digital wealth management services are primed to address many inherent existing issues and are expected to rapidly grow in the area,” says Michael Sek Pheng Yeo, Senior Research Manager at IDC Financial Insights Asia/Pacific.
SEA and TW faces unique issues in their financial services landscape: low levels of banked population and card penetration; aversion to taking on credit and low loan penetration; and low insurance penetration and investment. With this, digital financial services providers offer workable solutions to address these problems.
Figure 1: Digital Financial Services Solutions
This IDC study ascertains current market sizes for eWallets, digital lending, insurtechs, and digital wealth management, as well as to understand the trends driving their usage and new developments within the technology segments, and predict each segment’s future growth of the digital financial services in the seven markets of SEA and TW.
- Significant growth in digital financial services across SEA and TW, eWallets, digital lending and insurtech products will all grow over 10% CAGR from 2019-2023, with some solutions such as digital lending growing at a rate of over 50% average per year.
- Indonesia presents itself as the most promising market for many digital financial services solutions, particularly in ewallets and in digital lending. A large population and lack of access to traditional financial services means that these new digital services are perfectly suited to the needs of its populace and look set for a strong period of growth and increased usage.
- Data monetization is becoming key to success for the industry. Players in the region with access to multiple verticals in digital financial services – as well as those which have operations in multiple markets – stand in an increasingly fortified position to be able to leverage data across their operations and to convert that data into new insights which can drive new revenue. We are already seeing pan-regional leaders in place which look set to capture the benefits of their multi-vertical approach.
Digital Financial Services Solutions will be one of the key topics to be discussed at the 2020 IDC Asian Financial Services Congress happening on 13 – 14 Aug 2020 at the Marina Bay Sands Singapore. IDC Financial Insights will unveil its latest research on financial services and insurance industry and provide engaging discussions around Robotic Process Automation, AI in Banking, Governance, Risk and Compliance; and many more.
Culminating the event will be the awarding of the 20 Best Banks and 20 Challengers in Asia/Pacific*. For more information on the upcoming 2020 Asian Financial Services Congress, visit http://www.idc.com/AFSC2020
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