Annotation

Sonia Barquin & Vinayak HV. (2015, March) "Capitalizing on Asias Digital-
banking Boom." Retrieved April 27, 2015, from
http://www.mckinsey.com/insights/financial_services.
This scholarly web article was written for McKinsey & Company which is a global
management consulting firm that serves leading businesses, governments, non-
governmental organizations, and not-for-profits. The article provides a
comprehensive analysis of Asias digital-banking boom. The authors are a
consultant in McKinseys Kuala Lampur office and a principal in the Singapore
office. They base their article on survey, personal observation and the full report
Digital Banking in Asia: What Do Consumers Really Want?. Their stated goal is
to present Asias rapidly growing market of digital-banking services and to outline
main risks and opportunities for companies. The conclusion drawn is that despite
some structural obstacles, the surge in digital banking will continue and
incumbents and market entrants alike should prepare for the consequences. The
authors findings also show that security and simplicity are crucial aspects for
online offerings.
 Analysis on Capitalizing on Asias digital-banking boom
This scholarly web article under the title Capitalizing on Asias digital-banking
boom was written for McKinsey & Company which is a global management consulting
firm that serves leading businesses, governments, non- governmental organizations, and
not-for-profits. The article provides a comprehensive analysis of Asias digital-banking
boom. The authors are a consultant in McKinseys Kuala Lampur office and a principal in
the Singapore office. They base their article on survey, personal observation and the full
report Digital Banking in Asia: What Do Consumers Really Want?. Their stated goal is
to present Asias rapidly growing market of digital-banking services and to outline main
risks and opportunities for companies.
Firstly, the authors surveyed about 16,000 financial consumers in 13 Asian
markets, and the results showed drastic shifts in behavior compared with a similar survey
in 2011. To put it simply: Asian financial-services consumers are going digital, and fast.
From the authorspoint of view, while this rise of digital banking has been anticipated for
many years, several factors have combined to accelerate it, most notably the rapid
increase in Internet and smartphone adoption and growth in e-commerce. Both have
helped demand for digital banking move from early adopters to a broad range of
customers.
Secondly, the authors drew a parallel line and surveyed the consumers in developed
Asian markets and in emerging Asia on their willingness to be offered digital banking
services: more than 80 percent of the former said they were willing to shift some of their
holdings to a bank that offers a compelling digital proposition, while more than 50
percent of consumers in emerging Asia indicated such willingness.
Thirdly the researchers estimate more than 700 million consumers across Asia use
digital banking regularly, with a significant portion in fast-growing markets like China
and India. In developed Asia, 92 percent of respondents in 2014 said they had used
Internet banking, compared with 58 percent in 2011. Also, 61 percent had accessed
banking services using smartphones, more than three times the penetration seen in 2011.
Further, customers across Asia are using digital banking more frequently. In developed
Asia, customers connect with their banks over the Internet or via smartphones more often
each month than over traditional channels. In emerging Asia, these traditional channels,
especially ATMs, still dominate, but customers are using Internet and smartphone
banking almost five times more often than in 2011. As a result, across Asia, consumers
made fewer branch visits and calls in 2014 than in 2011.
Then, the authors made the assumption that the rapid shift toward digital banking
might suggest the demise of the bank branch, but several factors assure that branches will
retain an important role in Asia for the foreseeable future. For example, consumers are
using multiple channels, rather than turning solely to online or branch services.
Regulatory requirements, demand for personal advice, and a sense of security support the
continued need for branches, as the survey shows.
Finally, the authors findings also show that consumers value the quality of basic
services, the strength of financial products, brand reputation, and the quality of customer
service and experience with security and simplicity being crucial aspects for online
offerings.
The conclusion the authors come to is that despite some structural obstacles, the surge
in digital banking will continue and incumbents and market entrants alike should prepare
for the consequences.