Strategic adviser and fintech partner, or reactive follower? As technology and regulatory changes upend the transaction banking landscape, cross-functional teams rather than islands of expertise are the way forward, argues Boon Hiong Chan
In Asia, the rapid convergence of market needs, technology and evolving regulations have rearranged the banking industry’s goalposts, regardless of whether its incumbents are ready or not.
New roles, growth and challenges that present themselves from creatively-applied advanced technologies continue to raise the bar for banking model differentiators and competitiveness. In the payments area, the surge of ubiquitous “pay anywhere, anytime” fintech payments − the hallmark of today’s e-commerce and retail lifestyle activities − exemplifies this dynamism. It has led to new scope for managing corporate treasury in real time and brought additional areas of competitive advantage for treasurers. Wholesalers can now connect directly with their markets and solve supply chain demand forecasting, using transaction data to get a much more accurate picture of what is needed when and where.
At a macro level, ASEAN World Economic Forums1, the “Digital ASEAN”2 working group and the ASEAN central banks’ work on cross-border instant payment3, as well as the attractive prospects of a more consistent regional compliance policies should pave the way for further developments and adoption.
In the face of these and other external changes, to future-proof their strategies banks should address the following transformative drivers – examples of which are outlined below:
- Business model revisions by fintechs;
- Once-in-a-lifetime events; and
- Regulatory changes.