Regional Focus: The Digitalization of Commercial Banking in Asia-Pacific

Introduction

The Asia-Pacific (APAC) region stands at the forefront of commercial banking’s digital transformation. With its diverse economies, rapid fintech adoption, and unique regulatory environments, APAC is both a proving ground and a bellwether for the future of digital banking. From the bustling financial hubs of Singapore and Hong Kong to the dynamic markets of Australia, Thailand, and beyond, banks are reimagining how they serve commercial clients—ranging from sole traders and SMEs to large corporates—by leveraging digital technologies, data, and new business models.

The APAC Landscape: Diversity and Opportunity

APAC’s commercial banking sector is marked by its diversity. Markets like Australia and Singapore are home to mature banking systems and sophisticated digital infrastructure, while emerging economies such as Thailand and Indonesia are leapfrogging legacy systems with mobile-first and cloud-native solutions. This diversity creates both challenges and opportunities:

Customer Expectations: Business customers in APAC are increasingly digitally savvy, influenced by their experiences as retail consumers and by the rapid rise of digital-first challengers. They expect seamless, personalized, and omnichannel experiences from their banks.
Regulatory Environments: Regulatory frameworks vary widely, from open banking initiatives in Singapore and Australia to evolving digital banking licenses in Thailand and Malaysia. These frameworks shape the pace and nature of digital transformation, often acting as both catalyst and constraint.
Fintech and Challenger Banks: The region has seen a surge in fintech innovation, with neobanks and specialist lenders targeting underserved SME segments and raising the bar for customer experience and operational agility.

Key Drivers of Digital Transformation

Across APAC, several forces are accelerating the digitalization of commercial banking:

Competitive Pressure: Incumbent banks face mounting competition from digital-first entrants and fintechs, especially in payments, lending, and working capital solutions. In Australia, for example, challenger and specialist banks have made significant inroads into SME lending, mirroring trends seen in the UK and Europe.
Customer-Centricity: Banks are shifting from product-centric to customer-centric models, organizing around the needs and journeys of business clients. This means moving beyond selling individual products to solving holistic business problems, deepening relationships, and improving loyalty.
Technology and Data: The adoption of cloud-based, coreless architectures, open APIs, and advanced analytics is enabling banks to break down product and channel silos, deliver hyper-personalized experiences, and unlock new value from data.
Embedded Finance: There is growing momentum behind embedded finance—integrating banking services directly into clients’ business processes and platforms, such as ERPs and digital marketplaces. This trend is particularly pronounced in APAC, where digital ecosystems are thriving.

Regional Challenges and Priorities

While the vision for digital transformation is clear, APAC banks face distinct challenges:

Legacy Systems: Many incumbents are still burdened by fragmented, siloed technology stacks, making it difficult to deliver seamless digital journeys or integrate with partner ecosystems at scale.
Operational Agility: The ability to pivot quickly, experiment, and scale new propositions is often hampered by traditional operating models and a lack of cross-functional collaboration.
Data Quality and Access: Inconsistent data taxonomies, privacy concerns, and siloed information limit the potential of AI and analytics to drive customer insight and automation.
Regulatory Complexity: Navigating diverse and evolving regulatory requirements across markets adds complexity, especially for banks operating regionally.

Case Study: Australia’s SME Banking Revolution

Publicis Sapient’s research into the Australian SME segment reveals a market at a crossroads. While 79% of SMEs report satisfaction with their banks, the market is largely undifferentiated, with little perceived improvement since recent regulatory reforms. Digital channels are preferred by the majority of SMEs—over 80% among micro and sole traders—yet physical branches remain important for certain services, and branch closures can trigger significant customer churn.

Australian SMEs value trust, convenience, and service quality above pure digital innovation. However, there is a clear opportunity for banks to differentiate by blending the best of digital and human service, leveraging AI-powered chatbots and omnichannel experiences to replicate the authenticity and flexibility of in-person interactions. Banks that can deliver secure, supportive, and flexible digital experiences—while maintaining access to cash and physical services—are best positioned to win SME loyalty and drive growth.

Case Study: SCB TechX—A Platform Model for Southeast Asia

In Thailand, Publicis Sapient’s joint venture with Siam Commercial Bank (SCB TechX) exemplifies the region’s platform-driven approach to digital transformation. SCB TechX was created to deliver banking-as-a-service across Southeast Asia, combining banking and non-banking services (such as food delivery and travel booking) on a scalable, cloud-native platform. With over 10 million customers and a rapidly growing ecosystem, SCB TechX demonstrates how banks can compete with digital natives by rethinking engagement, accelerating time-to-market, and leveraging local expertise.

The platform’s modular architecture enables rapid integration with partners, supports embedded finance use cases, and provides a foundation for AI-driven personalization and automation. This approach is increasingly relevant across APAC, where banks must serve diverse customer needs and adapt quickly to changing market dynamics.

The Role of Embedded Finance and Ecosystem Partnerships

Embedded finance is reshaping the commercial banking landscape in APAC. By integrating banking services into clients’ digital journeys—whether through ERP plug-ins, marketplace lending, or API-driven payments—banks can deliver value at the point of need, reduce friction, and open new revenue streams. Success requires:

Modular, API-first Architectures: To enable efficient integration with multiple partners and platforms.
Agile, Cross-Functional Teams: To accelerate product development and respond to partner and customer feedback.
Strategic Ecosystem Partnerships: To access new distribution channels, data sources, and innovation capabilities.

Publicis Sapient’s experience building a BaaS-first SME bank in just nine months, orchestrating 22 fintech partners on a cloud-native platform, highlights the speed and flexibility required to succeed in this new environment.

Looking Ahead: Transformation Priorities for APAC Banks

To realize the full potential of digital transformation, commercial banks in APAC should focus on:

Customer Experience Excellence: Prioritize end-to-end, personalized digital journeys that blend digital and human interaction, leveraging data and AI to anticipate and meet business needs.
Core Modernization: Invest in cloud-based, coreless architectures to break down silos, enable agility, and support rapid innovation.
Data and Analytics: Build high-quality, accessible data foundations to fuel AI, drive insight, and enable proactive, value-added services.
Embedded Finance and Ecosystem Play: Develop modular, partner-ready platforms to embed banking services in clients’ workflows and tap into new value pools.
Agile Operating Models: Foster cross-functional, empowered teams and outcome-based funding models to accelerate delivery and adapt to market change.

Conclusion

The digitalization of commercial banking in Asia-Pacific is a journey defined by diversity, innovation, and relentless customer focus. Banks that embrace platform thinking, invest in modern technology and data, and build strong ecosystem partnerships will be best positioned to lead in this dynamic region. Publicis Sapient’s proven experience in APAC—spanning SME banking in Australia to platform ventures like SCB TechX—demonstrates the power of local expertise and global best practices in driving successful digital transformation.

To learn more about how Publicis Sapient is helping banks across APAC build the next generation of commercial banking, visit publicissapient.com/fs.