BANGKOK -- Southeast Asia's banking industry must embrace the digital revolution, including the rise of fintech, to seize opportunities to cater to the region's growing numbers of increasingly affluent middle-income customers, business leaders said Friday at an international conference in Bangkok.
One of the keys to the region's continued growth is the rise of middle-income consumers, the president of Kasikornbank, Pipit Aneaknithi, told attendees at a panel session of the Nikkei A300 Global Business Forum.
Aneaknithi said ASEAN banks are in a "transition period," and must provide better services for a new generation that greater capacity for consumption. "ASEAN's median age is 29. The potential of our consumer market keeps expanding," he said.
Now, with the availability of technology, banks can come up with low-cost business models for new consumers, and digital payment is a big business opportunity, Aneaknithi said. Kasikornbank has developed a system called K-Pay that is being tested at dozens of restaurants and food stalls.
Still, banks have been slow to adapt to the change and cannot come up with everything they need by themselves. Another challenge is to develop talent with a deep understanding of both banking and technology, Aneaknithi said.
"China and Singapore [offer] some good examples of the public and private sectors working together," Aneaknithi said. He called for stronger cooperation among countries in the region.
Frederic DyBuncio, president of SM Investments, the parent company of the Philippine's largest lender, BDO Unibank, echoed this sentiment, saying his company is exploring opportunities in fintech.
Fintech is "something we don't want to start from scratch," said the former JPMorgan Chase banker. DyBuncio said his company wants to partner with someone with experience and talent in the field "so we can jump-start the process."
Partnerships and the growth of new companies will help the development of the industry. Major Thai banks such as Kasikornbank and Bangkok Bank have recently set up venture-capital funds to support fintech startups, each with capital of 1 billion baht to 2 billion baht.
Kesara Manchusree, president of the Stock Exchange of Thailand, said the bourse is also ready to cooperate to foster growth in the high-tech and startup scenes. The exchange recently announced a new fundraising platform for startups that it hopes to have operational by the end of the year.
"We are speeding up the process to become a digital exchange," Manchusree said, referring to the new platform. "We are very good at matchmaking. We already have over 600 startups and small and medium enterprises in hand. We will continue to do what we do best," she said.