Improved financial inclusion could boost bank revenues by US$88b across Asia-Pacific

Singapore, 12 January 2018

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  • Banks in China, Thailand and Vietnam have the greatest opportunities for consumer and micro, small and medium enterprise (MSME) growth
  • Technology-led innovation and clear policy frameworks key to unlocking opportunities for those financially excluded across the region
  • Asia-Pacific region has the potential to be more financially inclusive than Latin America and EEMEIA by 2020

Banks across Asia-Pacific are yet to maximize the growth opportunities of financial inclusion, with the potential to boost bank revenues in emerging markets across the region by US$88b by 2020. Globally, potential bank revenue could reach as high as US$200b through increased servicing of financially excluded consumers and micro, small and medium enterprises (MSMEs) in 60 emerging countries, according to EY report Innovation in financial inclusion: Revenue growth through innovative inclusion.

EY's financial inclusion heat map shows China as having the greatest potential revenues from financial inclusion, estimated at US$63.4b, with Thailand (US$8.5b) and Vietnam (US$5b) also featuring among the top 10 countries globally.

More than 40% of MSMEs in the least developed countries globally reported challenges in obtaining financing, compared with just 15% in high-income regions. The report states that driving greater financial inclusion will generate sizeable economic benefits, boosting gross domestic product by up to 14% in developing economies such as the Philippines and 30% in frontier markets like Vietnam.

Mr. Jan Bellens, EY Global Emerging Markets Leader, says:

“Financial inclusion isn't merely a corporate responsibility goal, it's a strategic growth opportunity for financial institutions across emerging markets in Asia-Pacific. Not only does financial inclusiveness have a positive impact on financial institutions’ bottom line, but it is also good for local economies and individuals as inclusiveness tends to smooth income trends, grow local businesses, protect against natural and man-made disasters and help individuals to save for important life events. If banks do not capture this profitable growth opportunity, the gap will be filled by innovative nonbank institutions.”

Current retail bank account penetration across Asia-Pacific is at 65%, which EY estimates could increase to 74% by 2020.

“Banks’ financial inclusion growth opportunities will be the greatest in markets that embrace technology-led innovation and have a clear and supportive policy framework for financial stability,” says Mr. Bellens.

Mobile adoption and e-payments, national digital identity systems, open access to digital data and currency digitization are all crucial technology considerations for banks in these markets. A range of policy and systemic drivers in these markets will provide necessary safeguards and incentives that enable banks, telcos, FinTechs and other partners to innovate together and provide greater opportunities for unserved and underserved customers.

The report states that banks focusing on the following three actions will be most successful in enabling financial inclusiveness:

  • Customize offerings to raise relevance and deepen account adoption: to drive financial inclusion, banks must flexibly structure highly relevant and simplified financial solutions that meet the specific needs of their customers at affordable cost.
  • Innovate channels to reach more customers at lower cost: financial institutions likely require a distribution model that combines a mobile offering with some low-cost human interaction.
  • Creatively manage risk to address absence of credit histories: nonbanks are pioneering in this space, developing new underwriting and credit scoring analytics for individuals and businesses.

The complete research is available at

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