Asia to see 1.7b digital bank users by 2020
Print Edition
The number of digital banking consumers in Asia would reach 1.7 billion by 2020, with China, India, and ASEAN seeing the biggest gains, said a new report by global management consultants McKinsey & Co.
Titled “Asia Digital Banking: Winning Approaches In A New Generation Of Opportunities,” the report highlighted the enormous business opportunities that digital banking presents for Asian banks, as well as the risks to traditional business models.
The report showed that in China, the number of digital banking consumers will leap from 380 million in 2012 to 900 million in 2020.
Kenny Lam, a Hong Kong-based partner at McKinsey and head of Asia Retail Banking Practice who presented the report yesterday, said the firm’s research found that Asian consumers are becoming increasingly comfortable with using mobile and Internet channels for banking services, with their use jumping over 35 percent on average in the past three years.
“McKinsey’s research also observed a drop in branch usage of 27 percent across Asia. At a few leading banks, nearly 20 percent of key product purchases are now completed online. Across Asia, about 25 percent of pre-purchase decision-making and 40 percent of post-purchase servicing is conducted through mobile or Internet devices,” Lam said.
The report showed that over the next three years, the combined impact of digital banking initiatives could boost net profits by 35-45 percent for banks that learn to get it right. The value creation potential is very high, especially in emerging Asia, where banks lag well behind their leading Western counterparts in automating banking processes.
McKinsey’s analysis showed 20-30 percent of net profits are at risk in Asian banks that are unable to leverage digital technologies.
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