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Southeast Asian banks will most likely accelerate their digital transformation initiatives, due to the COVID-19 outbreak and changing consumer behavior resulting from safe distancing measures and lockdowns.
Incumbents could be challenged more than ever before, as they might struggle to offer the same level of customer services and competitive financial products as neobanks.
However, Fitch Ratings notes:
“We expect established, digitally advanced incumbent banks to gain from the trend as customers flock to convenience and perceived safety in times of crisis, while also reaping the benefits from potentially improved productivity as well as cost savings from closed branches in the medium term.”
Major banking institutions across the Southeast Asian region have reported a substantial increase in online or digital banking activities since the Coronavirus outbreak, Fitch confirms.
Bank Rakyat Indonesia (Persero) Tbk (BBB-/Stable) recently revealed that it experienced about an 88% year-over-year growth in online banking activity during Q1 2020. According to Fitch, a similar trend was observed by several other banking service providers based in Malaysia and the Philippines.
The three largest banks in Singapore reported significantly higher digital transactions conducted by clients. They also revealed that there was a considerable increase in the number of new digital accounts and …
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