The ESG and DEI Imperative: How Southeast Asian Banks Are Turning Compliance into Competitive Advantage

Introduction

Southeast Asia’s banking sector is undergoing a profound transformation, driven not only by digital innovation but also by a powerful commitment to environmental, social, and governance (ESG) and diversity, equity, and inclusion (DEI) principles. While banks worldwide are responding to rising expectations around sustainability and inclusion, Southeast Asian (SEA) banks are setting the pace—embedding ESG and DEI at the heart of their digital transformation strategies and, in doing so, converting compliance into a source of competitive advantage.

The Pressures Shaping ESG and DEI Priorities in SEA Banking

Several forces are converging to make ESG and DEI central to the transformation agenda for SEA banks:

Regulatory Evolution: SEA banks face a complex and evolving regulatory landscape, with authorities introducing new frameworks to address risks such as cybersecurity, data privacy, financial crime, and increasingly, sustainability and social responsibility. Regulatory pressure is a top barrier to transformation, cited by 43% of SEA banking leaders, but it is also a catalyst for innovation and investment in ESG and DEI.
Customer and Community Expectations: SEA’s young, digitally savvy population is demanding more from their banks—not just in terms of digital experiences, but also in ethical conduct, sustainability, and social impact. Community engagement is a top customer experience priority for 38% of SEA banks, and 76% say customer centricity drives key decisions.
Competitive Dynamics: The rise of digital-first challengers and global tech entrants is intensifying competition. To differentiate, SEA banks are leveraging ESG and DEI as pillars of trust and brand value, with 69% believing their ESG strategy gives them a competitive edge.
Internal and External Stakeholder Pressure: Over half (54%) of SEA banking leaders feel significant pressure to improve their ESG credentials, reflecting growing expectations from customers, employees, and regulators alike.

How SEA Banks Are Embedding ESG and DEI in Digital Transformation

SEA banks are not treating ESG and DEI as box-ticking exercises. Instead, they are integrating these imperatives into the fabric of their digital transformation strategies:

ESG as a Transformation Driver: 65% of SEA banking leaders say ESG is a key driver of their digital transformation plans. This is notably higher than in many other regions, including the U.S. (55%) and Australia (57%). SEA banks are setting ambitious sustainability targets, investing in green finance, and developing products that support environmental and social goals.
DEI Commitments Leading the World: 42% of SEA banks have made formal DEI commitments, well above the global average and significantly higher than the U.S. (22%) and the U.K. (32%). These commitments are being operationalized through inclusive hiring, leadership development, and community engagement initiatives.
Data-Driven Community Engagement: SEA banks are leveraging data and intelligent technologies to deepen their understanding of customers and communities. By combining customer data across systems, 42% of banks are able to personalize products, launch new offerings tailored to local needs, and engage more deeply with diverse communities.
Modernizing Core Systems for Agility and Impact: 35% of SEA banks are investing in modern, cloud-based core banking systems, enabling them to respond quickly to regulatory changes, launch ESG-linked products, and support inclusive digital services.

Tangible Business Benefits: From Compliance to Competitive Advantage

The integration of ESG and DEI is delivering measurable business benefits for SEA banks:

Enhanced Brand Trust and Customer Loyalty: By embedding sustainability and inclusion into their operations and offerings, SEA banks are building trust and loyalty among customers who increasingly prioritize ethical and responsible banking.
Talent Attraction and Retention: A strong DEI agenda helps banks attract and retain top talent, particularly among younger employees who value purpose-driven organizations.
New Growth Opportunities: ESG and DEI are opening up new markets and customer segments. Banks are developing green finance products, supporting underserved communities, and launching digital services that cater to diverse needs.
Regulatory Readiness and Risk Mitigation: Proactive investment in ESG and DEI helps banks stay ahead of regulatory requirements, reducing compliance risk and positioning them as leaders in responsible banking.

Contrasting Global Trends: SEA’s Leadership in ESG and DEI

While ESG and DEI are rising priorities globally, SEA banks are outpacing their peers in several key areas:

ESG as a Competitive Lever: 69% of SEA banks see ESG as a source of competitive advantage, compared to 51% in the U.S. and 63% in the U.K.
DEI Commitments: SEA’s 42% DEI commitment rate is the highest among major banking regions, with Australia (36%) and Germany (58%) also making progress, but the U.S. and France lagging behind.
Community Engagement: SEA banks are more likely to prioritize community engagement and personalized services, leveraging data to create richer, more inclusive customer journeys.

Publicis Sapient’s Role in Accelerating ESG and DEI Transformation

Publicis Sapient partners with leading banks across Southeast Asia to operationalize ESG and DEI as integral components of digital transformation. Our approach includes:

Customer-Centric Design: We help banks reimagine customer journeys, using data and analytics to deliver personalized, inclusive, and sustainable experiences.
Core Modernization: By moving away from legacy systems and adopting cloud-based architectures, we enable banks to become more agile, reduce costs, and accelerate ESG and DEI innovation.
Intelligent Technology Deployment: We deploy AI, machine learning, and advanced analytics to help banks gain deeper customer insights, automate ESG reporting, and launch new products at speed.
ESG and DEI Strategy Integration: We work with banks to embed ESG and DEI into their digital strategies, helping them build trust, engage communities, and differentiate in a crowded market.

The Path Forward

Southeast Asian banks are demonstrating that ESG and DEI are not just compliance requirements—they are strategic imperatives that drive growth, innovation, and trust. By embedding these principles into their digital transformation journeys, SEA banks are setting a global benchmark for responsible, inclusive, and future-ready banking. As the region continues to lead, Publicis Sapient stands ready to help banks turn ESG and DEI ambition into lasting competitive advantage.