Regional Deep Dive: Digital Transformation in APAC and Australasia Banking

The Digital Banking Revolution in APAC and Australasia

Asia Pacific (APAC) and Australasia are at the epicenter of a digital banking revolution. With a population that is digitally savvy and increasingly demanding, banks across Southeast Asia, Australia, and New Zealand are under immense pressure to modernize. The region’s unique blend of rapid digital adoption, evolving regulatory landscapes, and a strong imperative for financial inclusion creates both challenges and opportunities for banks seeking to leapfrog legacy constraints and compete with digital-first challengers.

Unique Regional Dynamics

Regulatory Complexity:
Banks in APAC face a patchwork of local regulations, with compliance requirements that can differ significantly between countries. Regulatory change is as much a barrier as it is a catalyst, with 36% of APAC banks citing regulation as a top challenge—on par with the disruption caused by COVID-19. This complexity is heightened by the region’s rapid digitization, which has made it a target for fraudsters and prompted regulators to tighten controls, especially around onboarding and KYC processes.
Rapid Digital Adoption and Customer Expectations:
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.
Financial Inclusion:
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.
Fraud and Security:
Rapid digitization has made APAC a target for fraudsters, prompting regulators to tighten controls and banks to invest in robust security and compliance frameworks. High-profile incidents, such as large-scale phishing scams in Singapore, have driven regulatory responses that directly impact digital transformation strategies.

Leapfrogging Legacy Constraints: The Modernization Imperative

Legacy core systems are stifling innovation and agility. Maintaining these systems is costly and resource-intensive, diverting investment from new products and customer experiences. As digital-native competitors and fintechs enter the market with cloud-native, modular platforms, incumbent banks must act decisively to avoid obsolescence.

Proven Strategies for APAC and Australasia

Cloud-Native, Composable Architectures: 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.
Coexistence Over “Big Bang” Migration: Rather than risky, all-at-once migrations, we advocate for 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.
Customer-Centric Design: We help banks reimagine operating models and customer journeys, leveraging data and digital channels to deliver personalized, seamless experiences that drive loyalty and growth.
Agile Delivery and Talent Transformation: Modernization is as much about people as it is about technology. We support banks in upskilling teams, fostering agile ways of working, and embedding a culture of continuous innovation.

Case Study: Siam Commercial Bank’s Rapid Transformation

Siam Commercial Bank (SCB), one of Southeast Asia’s leading banks, exemplifies the power of bold modernization. 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. This transformation was delivered in just 12 weeks, demonstrating that with the right strategy and partners, even large incumbents can move at startup speed.

Lessons from Australasia: Innovation at Scale

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:

Migrate core infrastructure to the cloud, enabling agility and unlocking data-driven insights.
Build modular, API-driven platforms that support rapid product development and integration with ecosystem partners.
Simplify and automate operations, focusing on end-to-end digital processing for high-value areas like onboarding and credit origination.
Scale new offerings quickly, leveraging digital challengers as testbeds for innovation.
Manage the coexistence of legacy and modern systems, using agile, customer-centric approaches to migration.

Overcoming Barriers: Actionable Strategies for APAC Banks

Adopt a Coexistence Migration Strategy: De-risk transformation by running new and legacy cores in parallel, migrating in controlled tranches.
Invest in Cloud and Data Platforms: Unlock agility, resilience, and real-time insights by moving to cloud-native, composable architectures.
Prioritize Customer Experience: Use data to personalize journeys, drive engagement, and differentiate in a crowded market.
Strengthen Regulatory and Security Posture: Build compliance and security into the core, leveraging automation and AI to stay ahead of evolving threats.
Foster a Culture of Agility and Innovation: Upskill teams, embrace agile delivery, and empower cross-functional collaboration.

The Road Ahead: Digital, Inclusive, and Customer-First

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.