Asian countries are lagging far behind the rest of world in incorporation of banking sector because of the rigid and old fashioned banking practices that have been prevalent in those countries for decades. But in recent time the situation is changing and Asian countries are showing their willingness and ability to take action to change the traditional banking practices through incorporation of financial technologies and collaboration with nonbanking payment players. This is allowing customers across the Asia to explore the digital banking channels through smartphone. This facility is really essential to in Asia to keep growth in banking sector relevant and sustainable. McKinsey & Company conducted surveys on 17,000 urban banked respondents from 15 countries to get insights about different aspects of Banking from the mass.

This survey is all about addressing the changes in customer behavior, reflecting themes like digital banking and use of financial technologies. This survey was done covering Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, Myanmar, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. The research work was independent of any business, government or any other organization. Any conclusion drawn from this survey are findings from the survey.

Key highlights of the survey

In this survey, McKinsey focused on finding answer to three important questions to broadly assess the overall industry environment and customer perception. Those are:
1. Are branches still relevant?
2. How disruptive are the new-age digital players?
3. Can banks still bank on loyalty?

The survey came out with interesting findings about the scenario of banking industry. Though physical branches are quite popular with the traditional customers to engage with banks; but the shift to digital banking from traditional banking is clear. Significant amount of people who use traditional platform of banking considers digital banking platform complex and do not feel that potential utility derived from digital banking is enough to go through the hassle of getting acquainted with digital banking platform. Survey suggests that banks should reorient their physical branches to offer more complex products and service and use digital platform for simpler offerings. The new technology oriented banking players are considering digital platform as the main source of revenue stream. Banks in Asia launch chat user base to acquire one million customer base. Many digital service providers have become initiator of new Banking services which includes a focus to become an ‘Ecosystem Player’ by offering best ways to serve daily needs of customers. This includes range of services like daily meal, grocery services, medical service, assistance in shopping etc. and they are aimed assisting customers in their daily activities and enhancing their lifestyle at the same time acquiring brand value in the process.

Increases in transection per customer in both emerging and developed Asian countries

This figure shows the interest in data sharing of the customer for more customized services from financial institution both in Emerging and Developed Asian region. This figure shows the level of satisfaction among the digital banking platform users both in Emerging and Developed Asian region who access with both mobile and internet.

Today’s consumer behavior is changed and curbed toward the growth of digital banking ecosystem. Competition among the digital bank and the traditional banks resulted significant impact on the overall quality of banking system. Because of the added value offered by fintechs, traditional banks are driven toward digital banking to retain the customer. Many well known traditional banks of Asian region adapted the digital platform for this circumstance. The survey indicates this shift is biggest one in the banking system for last few years. The survey clearly portrays that consumers interest is gradually growing towards the digital banking and it is matter of time that all bank will provide the same facility.