Asia Pacific (APAC) and Australasia are at the forefront of a digital banking revolution. The region’s unique blend of rapid digital adoption, regulatory complexity, and a strong imperative for financial inclusion is reshaping the competitive landscape for banks and fintechs alike. As digital challengers proliferate and customer expectations soar, banks must accelerate their transformation journeys to remain relevant, resilient, and ready for the future.
Banks in APAC and Australasia operate within a patchwork of local regulations, with compliance requirements that can differ significantly between countries. Regulatory change is both a barrier and a catalyst: 36% of APAC banks cite regulation as a top challenge, on par with the disruption caused by COVID-19. The region’s rapid digitization has also made it a target for fraudsters, prompting regulators to tighten controls, especially around onboarding and KYC processes. Navigating this landscape requires agility, robust compliance frameworks, and the ability to adapt quickly to evolving standards.
Consumers in APAC and Australasia are among the world’s most digitally engaged. In Southeast Asia, three out of four people lack sufficient access to financial services, making digital channels critical for financial inclusion. Meanwhile, 68% of APAC banks rank customer experience as a key organizational metric, driving a culture of customer-led innovation. In Australia, the rise of digital attackers and fintechs has forced incumbents to accelerate their transformation, with customers demanding experiences that match those offered in other sectors and countries.
The need to reach unbanked and underbanked populations is more pronounced in APAC than in many Western markets. Banks that can quickly develop accessible digital offerings stand to gain significant market share, especially as governments and regulators push for greater inclusion through digital means.
The competitive landscape is intensifying. Digital-only neobanks, fintechs, and even non-banks are entering the market, leveraging cloud-native architectures and agile operating models to deliver innovative services at speed. Incumbent banks must respond by modernizing their core systems, rethinking their operating models, and harnessing the power of data to deliver value-added services.
Migrating to cloud-based, modular core banking platforms enables banks to launch new products and services at speed, scale efficiently, and unlock the power of real-time data. Platforms like Mambu and Thought Machine allow banks to assemble independent components and connectors in any configuration, providing the flexibility needed to address diverse regulatory and customer requirements across the region.
Rather than risky, all-at-once migrations, leading banks are adopting a coexistence strategy—running new and legacy cores in parallel. This controlled, iterative approach allows for testing, learning, and risk mitigation, ensuring business continuity and regulatory compliance. It also enables banks to scale new offerings quickly while managing the transition of existing portfolios.
Banks that put the customer at the center of their transformation are best positioned to win. Leveraging data and digital channels to deliver personalized, seamless experiences drives loyalty and growth. Hyper-personalization, powered by AI and machine learning, enables banks to anticipate customer needs and orchestrate individualized journeys across products and channels.
Modernization is as much about people as it is about technology. Upskilling teams, fostering agile ways of working, and embedding a culture of continuous innovation are critical to sustaining transformation. Cross-functional teams, empowered to experiment and iterate, can accelerate delivery and drive meaningful change.
Facing intense competition from digital challengers and tech giants, SCB partnered with Publicis Sapient to reinvent its business model and technical foundation. The result: a new platform that enables rapid product launches and innovative customer engagement—such as integrating food delivery into the banking experience. SCB’s XPlatform, a one-stop cloud and DevOps solution, streamlines developer processes and accelerates the rollout of cutting-edge digital banking products and services. This transformation was delivered in just 12 weeks, demonstrating that with the right strategy and partners, even large incumbents can move at startup speed.
Bangkok Bank has delivered state-of-the-art mobile-only propositions on next-gen core banking infrastructure, allowing new features and services to be added in weeks rather than months. Their mobile banking app gives customers unprecedented control over their financial data and access to more than 100 features, covering banking, mutual funds, insurance, and forex. This approach exemplifies how cloud-native, modular platforms can drive both innovation and operational efficiency.
Australian banks are navigating a landscape of heightened competition, regulatory reform, and shifting customer expectations. The response has been varied—from building new challenger tech stacks to partnering with fintechs and experimenting with innovative business models like Buy Now, Pay Later (BNPL). The most successful banks are those that:
Banks in APAC and Australasia have a unique opportunity to leapfrog legacy constraints and set new standards for digital banking. By embracing cloud-native platforms, customer-centric design, and agile ways of working, they can deliver the experiences today’s customers demand—while reaching new markets and driving sustainable growth.
Publicis Sapient stands ready to help banks across Asia Pacific and Australasia navigate this journey, drawing on deep regional expertise and a proven track record of delivering transformation at speed and scale. The future of banking in APAC is digital, inclusive, and customer-first. The time to modernize is now.