KUALA LUMPUR – According to speakers at Maybank Kim Eng’s Invest ASEAN 2021 webinar on 10 June 2021, ASEAN Financials: The Shape of Things to Come, ASEAN’s banking sector will be hugely determined by the increase of globalisation, growth of wealth in the region, evolving talent requirements and higher regulations around capital and liquidity.
One of the speakers, Maybank Kim Eng’s own regional head, Thilan Wickramsinghe, included that ASEAN banks are on the correct path in tapping new opportunities with the rise of cross-border trade, higher digital adoption, and the increase of wealth.
“To win, they will need to adopt technology and new work models, and become closer to customers. But the path to growth needs to be tread carefully as tail risks from the pandemic remain,” he added.
The shifting of the supply chains from North Asia to ASEAN which results in the increase of cross-border trade, higher digital adoption, and rising wealth laid outstanding paths for the ASEAN banking sector to experience growth.
“A survey by our research teams shows that the critical factors that could drive medium-term profitability is rising non-interest income contribution particularly from wealth management as the region grows in affluence,” he continued.
Dr. Ong Li Lian, the group head and lead specialist at the ASEAN Macro Economic Research Office said ““ASEAN banks are very well buffered with high levels of high quality capital, in part because of the lessons learned during the Asian Financial Crisis.”
She also said that the banks have experienced strong growth and profitability due to the strong economic expansion in the region and that with the increase of wealth, there exists a growing demand for financial services that can be positive to the matter at hand.
Along with that, Ong noted that the biggest risk to face was whether regulation, supervision, and the identification of the systemic risks could keep up with the innovation that is to come.
Dean Tong, the managing director and head of human resources of the United Overseas Bank Ltd pointed out that there were niche areas in which artificial intelligence could be utilized to work alongside humans to boost productivity in the future.