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1、MovingtheNeedle How Digital Finance Can Drive Financial Inclusion in SEAA report from Kapronasia in collaboration with GrabNovember 2022ContentsExecutive Summary 3Key Findings 4Introduction 6Findings and Recommendations 7Conclusion 34Appendix 36Moving The Needle3Executive SummarySoutheast Asia is on

2、e of the most rapidly developing regions in the world and is set to become the worlds fourth largest economy by 2030.However,more than 70%of the adult population across the region is either“underbanked”or“unbanked,”with limited access to financial services.Millions of Southeast Asias small and midsi

3、ze enterprises(SMEs)also face large funding gaps.If the region wants to achieve its full potential,the challenges preventing further take-up of financial services need to be overcome.Importantly,Digital Financial Services(DFS)will play an important role in fostering greater financial inclusion.If DF

4、S are to fulfill their promise in this regard,obstacles constraining their further uptake will need to be addressed.It is to that end that we surveyed 4,800 consumers,gig-workers,and SMEs across six Southeast Asian markets:Malaysia,Singapore,Indonesia,Thailand,Vietnam,and the Philippines,to capture

5、perceptions of the current financial landscape and fintech developments,as well as challenges these users face while using DFS.The report shines a light on the nuances that exist between these three market segments and their experiences with financial products and services,both traditional and digit

6、al,and within and across the six markets surveyed.Through the survey the intent was to uncover these variations,understand the drivers behind them and draw out implications and make recommendations for the industry and policymakers to help adoption of DFS in the region and the provision of a better

7、customer experience.The pandemic accelerated the growth of DFS across the region.While this bodes well for greater financial inclusion,access and awareness remain challenges.Our survey found that there is variation across market segments,demographics,and countries,highlighting that it is imprudent t

8、o make generalized assumptions based on simple narratives that sound intuitively correct.Finally,as cybercriminals look to exploit weaknesses on DFS providers platforms,trust remains the fundamental pillar in the publics consciousness.Despite traditional financial institutions shortcomings,given the

9、 familiarity premium these still have,they will continue to co-exist with DFS providers into the foreseeable future.1 Worldometer,“South-Eastern Asia Population,”accessed 27 June 2022,https:/www.worldometers.info/world-population/south-eastern-asia-population;ASEAN Secretariat,“ASEAN development tra

10、jectories reach new milestone,”Aug 2021,https:/asean.org/asean-development-trajectories-reach-new-milestone/;The ASEAN Post,Athira Nortajuddin,“The Future Of Consumption In ASEAN,”Nov 2020,https:/ Bain&Company,Google and Temasek,“The Future of Southeast Asias Digital Financial Services,”Oct 2019,htt

11、ps:/ The Needle4Key FindingsThe pandemic accelerated the growth of DFS:The pandemic accelerated the growth of DFS among consumers,gig-workers,and SMEs.The greatest change was seen in payments,while digital lending saw the least change.Despite the growth of DFS,access and awareness remain challenges:

12、In terms of access there were concerns with extremely high fees and penalties for late/early repayment with respect to online loans and the higher rates of interest charged by online platforms.In terms of awareness,terms and conditions were highlighted as being difficult to understand.There is no on

13、e-size fits all DFS model for providers or customers:Our survey found that when it comes to managing finances,preferences for having one integrated app for all ones financial services versus having different financial services across different apps/platforms varied.Unsurprisingly,Gen Zs are early ad

14、opters of DFS across the region,but it is complicated:As would be expected,at least at first glance,younger segments of the population throughout the region have a proclivity towards DFS.Taking investing as an illustrative example,at a regional level,both Gen Zs and Millennials moved online a lot fa

15、ster during the pandemic than did the Baby Boomers.However,at a country level the picture is more nuanced.Trust is critical for customers when selecting a DFS provider:Trust is the key challenge when it comes to DFS and remains the top consideration when deciding on future DFS providers.Traditional

16、financial institutions will co-exist with DFS:Consumers,gig-workers,and SMEs highlighted a number of challenges they still faced with traditional banks and a number of key expectations where they would like to see improvements from these.However,they also highlighted a number of pain points with DFS

17、 providers.Given the familiarity premium traditional FIs still have,DFS providers are not about to displace them any time soon.123465Moving The Needle5MethodologyDefinitionsThe primary objective of this report is to explore the existing gaps and barriers in DFS and identify issues that can make digi

18、tal finance work better for individuals and businesses,thereby accelerating financial inclusion.Kapronasias report takes a deep-dive into the more nuanced reasons of what is restricting the usage of DFS in the region,despite Southeast Asia having a high mobile phone and internet penetration rateincl

19、uding lack of trust in platforms,poor awareness on how to use DFS,complicated terms and conditions and so on.The research also examines the pivotal role of fintech in financial inclusion,and the ever-changing landscape across the six target Southeast Asian countries in scope Malaysia,Singapore,Indon

20、esia,Thailand,Vietnam,and the Philippines.The team at Kapronasia used both primary and secondary research methods to analyze different aspects impacting the markets in scope.In addition to examining the existing literature,the Kapronasia team,in partnership with Nielsen,surveyed 4,800 consumers,gig-

21、workers,and SMEs in the six target countries to capture their perception of the current financial landscape and fintech developments,as well as challenges they face while using DFS.UnbankedAn adult without an account at a financial institution or through a mobile money provider.These people do not h

22、ave access to financial services and are forced to rely on inconvenient and often risky means to manage their money.UnderbankedThe underbanked are adults who do not make the full use of traditional financial services,often including banks.This is partly because they lack access to affordable financi

23、al services.Other times,it is down to their preference.GenerationsFor the purposes of the survey and this report,we have defined generational classifications as follows:NameBornAges(in 2022)Gen Z1998 200616 24Millennials1982 199725 40Baby Boomers198141+Moving The Needle6IntroductionWith a total popu

24、lation of almost 700 million people and a booming economy,which was valued at US$3.2 trillion in 2019,Southeast Asia is one of the most rapidly developing regions in the world and will become the worlds fourth largest economic bloc by 2030.However,despite the regions rapid growth,it still falls well

25、 below its full potential.That is because more than 70%of the adult population is either“underbanked”or“unbanked,”with limited or no access to financial services.In addition,millions of Southeast Asias small and midsize enterprises(SMEs)face large funding gaps.4 In a 2021 study,for example,over 60%o

26、f surveyed Southeast Asian MSMEs were unable to get a loan when they needed financing.5To unlock the regions full potential,the challenges preventing greater access to financial services need to be overcome.Digital Financial Services(DFS)could hold the key.A report by the Asian Development Bank foun

27、d that the effect of leveraging digital technology to bank the unbanked could boost national GDP by 2%to 3%in markets like Indonesia and the Philippines,and 6%in Cambodia.6The region is well placed to adopt such digital technologies as 61%of Southeast Asias population is under the age of 35 and is i

28、ncreasingly online.The number of internet users in Southeast Asia will grow 3.1%year over year in 2022,making it the second fastest growing region in the world.The number of smartphone users in Southeast Asia,meanwhile,will reach 326.3 million in 2022 and rise steadily through 2026.7 As such,DFS pro

29、viders have the potential to play a major role in extending financial services access to the un-and under-banked.However,if financial services,digital or otherwise,are to be rolled out to the masses in the region,greater understanding of consumers,gig-workers,and SMEs demographics,preferences,behavi

30、ors,experiences with,and expectations for both traditional and digital financial services in Southeast Asia is required.Such grassroots insights derived from interacting directly with the users themselves will go a long way in helping both policy makers and DFS providers understand sentiments on the

31、 ground,the drivers behind these,their implications,and importantly point the way towards practical steps that can then be taken to increase the uptake of DFS across the region.3 Worldometer,“South-Eastern Asia Population,”accessed 27 June 2022,https:/www.worldometers.info/world-population/south-eas

32、tern-asia-population;ASEAN Secretariat,“ASEAN development trajectories reach new milestone,”Aug 2021,https:/asean.org/asean-development-trajectories-reach-new-milestone/;The ASEAN Post,Athira Nortajuddin,“The Future Of Consumption In ASEAN,”Nov 2020,https:/ Bain&Company,Google and Temasek,“The Futur

33、e of Southeast Asias Digital Financial Services,”Oct 2019,https:/ The Tech for Good Institute,“The Platform Economy:Southeast Asias Digital Growth Catalyst,”2021,https:/techforgoodinstitute.org/the-platform-econo-my-southeast-asias-digital-growth-catalyst/6 ADB,“Digital Finance to Bank the Unbanked

34、Can Boost GDP by As Much As 6%in Southeast Asia,”Jan 2017,https:/www.adb.org/news/digital-finance-bank-un-banked-can-boost-gdp-much-6-southeast-asia7 WEF,Joo-Ok Lee and Shaun Adam,“ASEAN is poised for post-pandemic inclusive growth and prosperity heres why,”Jan 2022,https:/www.weforum.org/agen-da/20

35、22/01/asean-is-poised-for-post-pandemic-inclusive-growth-and-prosperity-heres-why/;eMarketer,Man-Chung Cheung,“The upside for internet user growth remains high in Southeast Asia,”May 2022,https:/ Cheung,“Rising smartphone usage paves way for ecommerce opportunities in Southeast Asia,”May 2022,https:

36、/ The Needle7Findings and RecommendationsFigure 1Percentage of respondents that used DFS a lot more or completely switched during the pandemic,By product,RegionalThe Pandemic Accelerated the Growth of DFSFindingsThe pandemic accelerated the growth of DFS across consumers,gig workers and SMEs.At a re

37、gional,non-segmented level,the greatest change was seen in payments,with 65%of the participants surveyed saying that they had moved a lot more of their payments online or had completely moved online.That was followed by general banking(50%),investing(48%),and insurance(40%).Borrowing money saw the l

38、east change,with 27%of people saying that they had moved a lot more online or had completely moved online(Figure 1).Our quantitative and qualitative research survey uncovered six key overarching findings.Each finding comes with its own set of drivers,implications,and recommendations.The six key find

39、ings are as follows:Moving The Needle8Breaking that down by segment(consumers,gig-workers,and SMEs)at a regional level,a similar pattern occurs.Gig-workers were marginally ahead of consumers in terms of their move to payments online,with 67%reporting that they had moved a lot more of their payments

40、online or had completely moved online,versus 66%for the latter.SMEs saw slightly less growth in accepting online payments for sales,with 61%either saying that they were conducting a lot more sales online or had completely moved online.In terms of general banking,60%of gig-workers and 57%of consumers

41、 said that they had moved a lot more online or had completely moved online(SMEs were not included).Borrowing money saw the least growth with 24%of consumers,31%of SMEs,and 35%of gig-workers saying that the pandemic had led them to move a lot more online or move completely online(Figure 2).Figure 2Pe

42、rcentage of respondents that used DFS a lot more or completely switched during the pandemic,By product and segment,RegionalAcross the board,at a country level,payments saw the most accelerated growth during and post-pandemic,with similar growth rates across the countries in terms of participants say

43、ing that the pandemic had led them to make a lot more payments online or to completely move online.Malaysia saw the most growth,with 70%and Singapore the least,with 54%.After payments,the results were slightly more varied.Malaysia saw the highest increase in general banking and within the country,it

44、 was the area that saw the highest growth rate after payments at 58%.That was followed by Thailand where 55%of participants said that they were either doing a lot more general banking online or had moved completely online.Moving The Needle9For investing,Indonesia saw the highest growth rate of all t

45、he countries,where investing(53%)followed payments with the second highest financial service growth area within the country.That was followed by Vietnam that saw 52%of participants saying that they had moved investing online by a lot or completely.Borrowing money,meanwhile,was the financial service

46、that saw the least growth across the board,with Malaysia and Singapore recording the lowest increase at 19%and 21%respectively,while Vietnam saw the highest increase at 40%.(Figure 3)Figure 3Percentage of respondents that used DFS a lot more or completely switched during the pandemic,By product and

47、countryMoving The Needle10Breaking it down by segment(consumers,gig-workers,and SMEs)at the country-level,here are some of the key product findings:More details on the country breakdown can be found in the appendix in Figure Appendix 1.Payments:Malaysian consumers saw the largest growth in payments

48、across all segments and countries,with 73%of consumers saying that they had moved a lot more payments online or moved them completely online.That was followed by gig-workers in Vietnam at 72%,while Singaporean SMEs registered the lowest growth in payments,with 49%saying that they had moved a lot mor

49、e payments online or moved them completely online.General banking:Malaysias consumers also saw the greatest increase in moving general banking services online across all segments and countries at 67%.That was followed by Malaysian gig-workers at 66%,while Singaporean consumers saw the least increase

50、 at 47%(SMEs were not included).Investing:Meanwhile,the gig-worker segment in Thailand recorded the greatest increase in investing online,with 57%of participants saying that they had moved their investing online by a lot or had completely moved online.Malaysian and Singaporean SMEs,meanwhile,recorde

51、d the lowest increase in online investing at 38%.Insurance and borrowing:For insurance,Vietnamese SMEs recorded the greatest increase at 59%,whereas SMEs in the Philippines saw the least at 31%.Finally,Vietnamese SMEs also saw borrowing increase the most online at 52%,while consumers in Singapore sa

52、w the least at 14%.Moving The Needle11DriversIt is perhaps hardly surprising that online payments saw the greatest acceleration in uptake during the pandemic.Afterall,consumers,gig-workers,and SME founders were serving stay-at-home notices during lockdowns and were left with little choice as physica

53、l contact was either heavily curtailed or avoided.The same is true of general banking,where branches were shuttered across the region.Meanwhile,individuals that were consuming less suddenly found themselves with a surplus of disposable income which they invested online.The driver behind the growth i

54、n online insurance would have been similar to that of general banking,individuals who could no longer meet in person were forced online.Borrowing money likely saw the least growth as in aggregate individuals were more wary of taking on additional debt during this risk off environment.It might have a

55、lso been because these segments could have faced difficulties in securing loans,due to a general lack of credit history.Gig-workers and SMEs were generally more inclined to borrow than consumers.That could have been driven by more immediate cash flow needs:either to expand their business online and

56、grow,or to create a defensive buffer if business was suffering.although we did not validate these assumptions.ImplicationsThat online payments increased is an opportunity for both policymakers and providers.Digital payments tend to lead the uptake of other DFS.With people becoming more accustomed to

57、 making digital payments,they should become more amenable to consuming other DFS,which is an opportunity for DFS providers.Taking it down to the country-level,we find that the uptake of DFS was pronounced across the board,with the exception being Singapore.That a developed market such as Singapores

58、saw a more muted switch to DFS during the pandemic is hardly surprising given that many of the countrys well banked consumers,gig-workers,and SMEs are already online or are being sufficiently served by their existing providers.Such accelerated growth of DFS in Asias markets should encourage more com

59、petition as providers,either homegrown or from overseas,look to meet growing demand.Increased competition ultimately benefits the end user as it pushes incumbents to improve their service offerings and provides more choice for consumers,gig-workers,and SMEs.In Asias less well banked markets the resu

60、lt should be greater financial inclusion.RecommendationsBuilding on the momentum of the accelerated growth in DFS across the emerging markets within the region,governments should take the opportunity to build out their real-time payment rails and overlay services that sit on top of them.They should

61、also invest in building the public utilities that would further facilitate the provision of and take-up of DFS.Such utilities would include a centralized digital identity scheme such as Singapores Singpass and could expand to a more comprehensive KYC utility.Governments could provide such utilities

62、under publicprivate partnerships(PPPs).Past precedent shows that once a country has a real-time payment system in place,other services can be built around it.Indias Unified Payments Interface(UPI)is a classic example.As the DFS ecosystem develops,so will greater financial inclusion.Service providers

63、 themselves,meanwhile,should focus on alleviating the four main pain points afflicting consumers,gig-workers,and SMEs,namely:trust and security,access,complicated processes,and awareness.Moving The Needle12Despite the Growth of DFS,Access and Awareness Remain ChallengesFindingsDespite the promise of

64、 DFS to tear down the barriers preventing large swathes of Southeast Asias populations from benefiting from financial services,access and awareness are still issues for many.While the pandemic accelerated the growth of DFS across the region,our findings show that both access and awareness remain cha

65、llenges acting as bottlenecks constraining further uptake.Starting with access,at a regional level,almost half of consumers and gig-workers(49%and 48%respectively),for example,were concerned with extremely high fees and penalties for late/early repayment with respect to online loans.Breaking that do

66、wn to a country level,we find the problem of high fees and penalties to be a particular issue in Indonesia,with 73%of consumers and 68%of gig-workers saying that it was a top concern(Figure 4).Almost half(46%)of SMEs,meanwhile,highlighted higher rates of interest charged by online platforms as a con

67、cern preventing them from applying for a loan online.Again,this was particularly so in Indonesia,with 57%of SMEs highlighting it as an issue(Figure 5).Figure 4Figure 5Percentage of SMEs listing online platforms have higher rates of interest as a top concern on getting online loans,Regional and by co

68、untryPercentage of consumers and gig-workers listing extremely high fees and penalties for late/early repayment as a top concern on getting online loans,Regional and by countryRegion Malaysia Singapore Vietnam Thailand Philippines IndonesiaRegion Malaysia Singapore Vietnam Thailand Philippines Indon

69、esiaMoving The Needle13In terms of awareness,at a regional level,just over a third of consumers and gig-workers(36%and 35%respectively)and 28%of SMEs listed lack of clarity on the products being offered as a pain point with DFS.Sentiment here was relatively uniform for both consumers and gig-workers

70、 across each of the countries in scope.There was some divergence for SMEs,where 35%highlighted the issue in Thailand in contrast to 19%in Vietnam(Figure 6).In a similar vein,a third of consumers and gig-workers(32%and 33%respectively)highlighted terms and conditions being difficult to understand as

71、a top pain point with digital financial technology services.41%of SMEs,meanwhile,said that too much technical jargon in the terms and conditions was a pain point with digital financial services.There was also variation at the country level.Among consumers and gig-workers,the issue seemed to be most

72、prevalent in Thailand,where 43%of gig-workers and 40%of consumers highlighted terms and conditions being difficult to understand as a pain point.Indonesia,by contrast,fared better,with 26%of gig-workers and 22%of consumers highlighting the issue.It was really SMEs though that seem to struggle most w

73、ith terms and conditions being difficult to understand.Half(50%)of SMEs surveyed in Vietnam highlighted it as an issue,while only a third(33%)in Indonesia found it to be so(Figure 7).Figure 6Figure 7Percentage of respondents listing lack of clarity on the products being offered as a pain point with

74、digital financial technology services,By segment,Regional and by countryPercentage of respondents listing terms and conditions are difficult to understand as a pain point with digital financial technology services,By segment,Regional and by country Moving The Needle14DriversStarting with access firs

75、t,the main issues,as these pertain to getting online loans,seem to revolve around costs,commercially unattractive terms and conditions(T&Cs),or other barriers such as eligibility.In terms of costs and unattractive T&Cs,part of the problem could be due to a lack of historical competition in the marke

76、t,whereby players feel that there is no immediate threat of another player coming along and offering something better.This is changing as more players enter the market and offer new and more compelling and easier to access value propositions.It could also be that many of these platforms view these s

77、egments as higher risk and need to position their products accordingly.That could also explain some of the eligibility issues in terms of why people say that they do not meet the eligibility criteria for online loans,for example.In terms of awareness,issues converge around knowledge,understanding,an

78、d clarity.This is likely due to a lack of financial literacy or digital savviness on behalf of the users and a failure on behalf of the providers to provide sufficient learning materials and/or to clearly articulate their product propositions and T&Cs.ImplicationsWhile fintech is often touted as the

79、 great equalizer,providing the un-and under-banked with access to financial services,the reality is perhaps more nuanced.Firstly,DFS does have the potential to increase financial inclusion,but our survey shows that end users are still struggling with access to DFS.While DFS have no doubt helped many

80、,its potential is still not being met as large numbers still go un-or under-served.That in turn inhibits economic growth potential,precludes excluded households and businesses from building up resilience against economic shocks that emerging markets are vulnerable to experiencing,and crimps greater

81、equality.The results also found that a number of users were unaware of the services and products that were available to them or the platforms that offered them,lacked the knowledge to use them,or found the products and T&Cs too difficult to understand.This awareness issue will result in a loss of po

82、tential business for DFS providers as some potential customers may never reach them or may be unable to consume their products.It also prevents excluded households and businesses from building up resilience that would have otherwise benefited.RecommendationsOur results show that providers of DFS cou

83、ld be doing a better job at aligning with the customer segments that they serve.In terms of access,that could mean lowering fees and charges or providing more attractive T&Cs.To make it commercially viable and to mitigate against risk,providers might want to consider offering an integrated,seamless

84、version of their product offering-e.g.a one stop shop for ease of access,and leveraging non-traditional,alternative customer datasets more effectively to assess creditworthiness.This credit insight can help better serve this segment of the market that is typically eschewed by risk-averse traditional

85、 financial institutions.In terms of awareness,providers of DFS could also be doing a better job at reaching their customers in the channels where they can be found,be that digital or physical.They could also be thinking more creatively about how to make it easier for their potential customers to con

86、sume their products and services.That starts with educating their customer segments through mediums that make sense to them.This could involve live demonstrations at local shopping centers,physical and digital financial literacy classes,or streamed modules online.They also need to be thinking about

87、streamlining their T&Cs to make these concise and written in simple to understand language.Finally,the product propositions for DFS themselves need to also be streamlined so that they are simple and easy to understand.The public sector also has a role to play in all of this whether that be governmen

88、ts,policymakers,or regulators.On the regulatory side,regulators can institute consumer protection rules that prevent unfair and usurious practices.The public sector can also institute financial literacy programs and incentivize people to sign up.Incentives could include free or heavily subsidized pr

89、ograms and even extend to giving out vouchers or providing credits that can be used to deduct against tax or the purchase of public services.Moving The Needle15There is No One-Size Fits All DFS Model for Providers or CustomersFindingsOur survey found that when it comes to managing finances,preferenc

90、es for having one integrated app for all ones financial services versus having different financial services across different apps/platforms varied.At a regional level,61%of consumers and just over half of SMEs(53%)said that they would prefer to have a single app for all their financial services with

91、 commonly cited reasons in qualitative interviews being ease and convenience.By contrast,less than half of gig-workers(43%)said that they would prefer having one integrated app(Figure 8).When we get down to a country level,we do see wide variation across countries and the three segments in terms of

92、preferences for managing finances in a single app versus multiple apps/platforms.In Malaysia,70%of consumers and 65%of SMEs preferred a single app,while only 43%of gig-workers did so.In Thailand,51%of consumers said that they would prefer a single app,contrasted with 70%of gig-workers and 66%of SMEs

93、 that said they would prefer to manage their finances over multiple apps/platforms.In Singapore,65%of consumers preferred a single app,but only 36%of gig-workers and 49%of SMEs did so(Figure 8).Figure 8Percentage of respondents listing having one integrated app that has a variety of different financ

94、ial services as a preference in managing finances in the future,By segment,Regional and by countryMoving The Needle16Looking at the segments further across countries,we see that while the majority of consumers across each of the countries said that they had a preference for a single app(with Malaysi

95、a scoring highest with 70%and Thailand lowest with 51%),we see that is almost flipped on its head with gig-workers,where in most countries these had a preference for managing their finances over multiple apps/platforms(with Thailand scoring highest with 70%and Indonesia lowest at 46%).For SMEs,the r

96、esults were a bit more mixed.Large preferences for single apps were seen in Malaysia(65%),Indonesia(62%),and Philippines(57%),whereas a preference for multiple apps was seen in Thailand(66%).Vietnam and Singapore were roughly split down the middle 50/50(Figure 9).Figure 9Percentage of respondents li

97、sting a preference for having different financial services in different apps/platforms vs.having one integrated app that has a variety of different financial services,By segment,Regional and by country 49%Moving The Needle17DriversThe preferences seen across countries and segments boil down to exper

98、ience.While it would no doubt be easier and convenient to have all your financial services in a single app,that has to be balanced against whether the financial service on offer meets the needs and requirements of the user,at the right price point,and with the right terms and conditions.It is hard t

99、o imagine a single app being able to provide exactly that to everyone.Therefore,companies need to pay close attention to these contrasts in preferences,and develop the right products and services for their markets.Where we see a majority saying they prefer to manage their financial services all thro

100、ugh a single app,this could potentially be because they have either had a good experience with a provider that is doing that or they like the idea of it.In contrast,where you see preferences to manage finances over multiple apps,that may be because those individuals have found that these single,inte

101、grated apps are not able to give them exactly what they are looking for,such as the right price or terms and conditions.ImplicationsWhat is clear from the results of our survey is that the market supports both a single app with a variety of different financial services and having different financial

102、 services in different apps/platforms.Some users will prefer the ease and convenience of a single app for all of their financial services,while others will want to pick and choose financial services according to which provider is perceived to best meet their unique needs and requirements for a parti

103、cular product.RecommendationsWhatever model DFS providers opt for,the models should focus on ensuring a seamless,frictionless,personalized customer journey over a safe and secure platform.Leveraging data alongside artificial intelligence and machine learning(AI/ML)will be a key factor in delivering

104、hyper-personalized services to that segment of one.Moving The Needle18Unsurprisingly,The Young Are Early Adopters of DFS Across the Region,but it is ComplicatedFindingsAs would be expected,at least at first glance,younger segments of the population throughout the region have a proclivity towards DFS

105、.Taking investing as an illustrative example,in the consumer segment,Gen Zs(51%)moved online faster than Millennials(49%),who in turn moved online faster than Baby Boomers(39%).For gig-workers,it was Millennials(57%)that moved online faster than Gen Zs(50%)and Baby Boomers(48%)(Figure 10).Figure 10P

106、ercentage of consumers and gig-workers that moved investing a lot more or completely switched online during the pandemic,By generation,Regional Moving The Needle19However,when we get down to a country level,we see that the picture is a lot more nuanced.In Malaysia,Baby Boomers moved online a lot fas

107、ter than Millennials and Gen Zs in both the consumer and the gig-worker segments.Vietnam was another interesting case,whereby Baby Boomers moved online a lot faster than both Millennials and Gen Zs across both segments:consumers,and gig-workers.The contrast was particularly sharp for the gig-worker

108、segments.For gig-workers in Vietnam,Baby Boomers(71%)outpaced both Gen Zs and Millennials(both 51%)by quite some way.Singapore was also interesting with Millennials moving online a lot faster than both Gen Zs and Baby Boomers across both segments:consumers,and gig-workers(Figure 11).Figure 11Percent

109、age of consumers and gig-workers that moved investing a lot more or completely switched online during the pandemic,By generation,Regional and by country Gen ZMillennialsBaby BoomersMoving The Needle20Importance of fintech after Covid-19In terms of the perceived role that fintech has to play in the r

110、ecovery of countries economies after Covid-19,again,at least at first glance,younger segments of the population behaved as might be expected,where these were also more positive about fintechs role.At a regional level,the percentage of participants saying that fintech plays a critical role in their c

111、ountrys economic recovery was higher among Gen Zs than it was among Millennials and Baby Boomers across both segments:consumers,and gig-workers(Figure 12).Figure 12Percentage of consumers and gig-workers saying that fintech plays a critical role in their countrys economic recovery after Covid-19,By

112、generation,Regional 45%42%49%43%32%Moving The Needle21Once again,however,the picture becomes a lot more nuanced once you get down to the country level.Certainly,some of the countries demographic segments across consumers and gig-workers performed to stereotype,but there were also notable exceptions

113、and standouts.For example,Baby Boomers(52%)in Indonesias gig-worker segment were more positive than both Gen Zs and Millennials(both 40%).The gig-worker segment in the Philippines also bucked expectations,with Baby Boomers(57%)being more positive than Millennials(49%)and Gen Zs(50%).Likewise in Viet

114、nams consumer segment,a higher percentage of Baby Boomers(58%)were also more positive than both Gen Zs(55%)and Millennials(55%).Meanwhile,Malaysias gig-worker segments stood out,with both Millennials and Gen Zs being a lot more positive than Baby Boomers.Singapores gig-worker segment also stood out,

115、with Gen Zs(56%)being more positive than both Millennials(38%)and Baby Boomers(37%)(Figure 13).Figure 13Percentage of consumers and gig-workers saying that fintech plays a critical role in their countrys economic recovery after Covid-19,By generation,Regional and by country Gen ZMillennialsBaby Boom

116、ersDriversAt a regional level,the simple narrative is that Southeast Asia is made up of a number of large markets with high mobile phone penetration and sizable young,tech-savvy populations that have traditionally been excluded from financial services.Unsurprisingly,these moved online faster than th

117、eir older counterparts during the Covid-19 epidemic,as they had the means and wherewithal to do so.Given that these younger segments have also directly benefitted from fintech,these are also a lot more positive about the role fintech plays in their countrys economic recovery.While there is no doubt

118、a lot of truth in this narrative,when we get down to the country level,we see that this story does not always ring true.There are a number of drivers behind this.Moving The Needle22On the speed to moving online,it is important to note that we are only looking at investments in the example above.The

119、trends that we see in our example are not necessarily indicative of what is happening across all DFS in the region.Where we see Baby Boomers being faster at moving online during the pandemic at the country-level it might be simply a reflection of older generations having surplus wealth that they cou

120、ld invest online while a lot of Gen Zs and Millennials have no such wealth to invest.It might also be because the older generations are more financially literate than the younger generations.The markets and segments where we see Gen Zs and Millennials being more positive about the role of fintech in

121、 their countrys economic recovery fits our narrative above.These are more informed and excited about the role of technology,likely having had first-hand positive experiences in using fintech products and services.Baby Boomers,meanwhile,that are less tech-savvy,likely lack both the knowledge,mediums,

122、and comfort-levels to have directly used fintech products and services and so are more uncertain about fintechs overall role.In markets and segments where this is not the case it might be because Gen Zs and/or Millennials in these markets and segments have had less experience in using fintech servic

123、es than their older peers(i.e.,because of a lack of wealth to invest in our example above).It could also be that in markets such as Vietnam,Philippines,and Indonesia,older gig-workers,for example,have likely had exposure to earning higher incomes from online platforms.Previously,many of them would h

124、ave been in the informal economy or doing odd jobs for some time.It is perhaps then not surprising that these workers believe fintech can drive economic recovery.Alternatively,it could also be that these younger populations may have had relatively more negative experiences than their older peers and

125、 so are less positive about fintechs overall role.That could certainly be the case if these younger segments have lost money in the crypto space,for example,a very popular focus for the younger segments of the population in the regions emerging markets.Moving The Needle23ImplicationsTwo main implica

126、tions arise out of these findings.The first is,Asia markets with their sizable young,tech-savvy populations are natural target market segments for DFS providers.The second main implication is to not make assumptions about customer needs.There are both country,segment,and demographic nuances remindin

127、g us that we must not rely on simple narratives that intuitively make sense.RecommendationsLinked to the first implication above,if DFS providers want to“win”with Gen Zs and Millennials it will be essential that they offer them the type of digital user experience that these younger segments of the p

128、opulation have become accustomed to that is,a frictionless,seamless,personalized customer journey.Gen Zs and Millennials need to be able to consume DFS in the way they consume content on Twitter or Tik Tok.It also means that Gen Zs and Millennials will also need a choice,because they move from Tik T

129、ok to Twitter to Grab to Netflix within short time frames.That means they need to have,within the real estate of the app,the ability to travel through.It needs to be simple,but it needs to be a journey.DFS providers will therefore need to focus on streamlining their processes,products,services,and T

130、&Cs.They will also need to focus on providing simple,easy to digest learning experiences to build awareness and understanding of DFS products.Another important point to make is that where certain demographics within markets are not moving online as fast as might be expected,it will be important for

131、DFS providers to conduct both quantitative and qualitative surveys to find out where the bottlenecks are.If DFS providers can understand what is constraining certain demographics,they can then set about addressing the problem.Linked to the second implication and the point above,while it is tempting

132、to draw on simple narratives and to construct strategies around these,to really succeed in these markets,segments,and demographics,it will be critical for service providers to conduct both quantitative and qualitative surveys if they are to cater for the differing needs and requirements of their tar

133、get market segments.Moving The Needle24Trust is Critical for Customers When Selecting a DFS ProviderFindingsOur survey shows that trust remains the key challenge when it comes to DFS.For example,at the regional level,half of consumers and gig-workers(49%and 52%respectively),and 40%of SMEs said that

134、fraud and security issues were a barrier to using/accepting e-wallets.At a country level,fraud and security issues were also key barriers to using/accepting e-wallets.This was markedly true of SMEs and gig-workers in Vietnam(77%and 58%respectively)and gig-workers(71%)in Indonesia.It was also true ac

135、ross all three segments in the Philippines and surprisingly,among a high percentage of consumers in Singapore(58%)(Figure 14).Figure 14Percentage of respondents listing I am worried about fraud/security issues as a barrier to using e-wallets,By segment,Regional and by country 49%52%40%41%45%28%25%58

136、%58%59%58%53%39%71%61%77%44%43%42%43%39%Moving The Needle25More broadly,trust(having a trustworthy provider)is the predominant consideration when deciding future financial providers.That was true across all three segments:consumers(56%),gig-workers(56%),and SMEs(56%)at the regional level(Figure 15).

137、Figure 15Ranking of importance when deciding future financial providers,percentage of respondents ranking first,By segment,Regional 2%Trustworthy providerSafety and security of the platformsGood customer supportLocal dialect language supportOffering training programsSimplicity of user interfaceFlexi

138、bility to customize financialproducts based on my needsCost-effective solutionsWide variety of product and servicesReduced time to onboardOther anciliiary services such asBNPL,discounts,rewardsPresence in multiple countriesPopular brand in the local marketTransparent operations56%56%56%25%6%2%2%1%2%

139、3%1%0%0%0%1%1%19%10%2%3%2%2%1%1%1%0%1%0%0%25%5%2%2%1%1%0%0%0%4%1%1%Moving The Needle26That remains the case at a country level too,across all three segments:consumers,gig-workers,and SMEs,with trust(having a trustworthyprovider)being the predominant consideration when deciding future financial provi

140、ders.There was,however,some variation in the relative degree across countries and the three segments.The percentage of those ranking trustworthy provider as the top concern when deciding future financial providers was relatively higher in Vietnam,Philippines,and Indonesia than in Malaysia,Singapore

141、and Thailand across all three segments.Within Singapore,the percentage of gig-workers(36%)that ranked this concern first was not as high as SMEs(50%)and consumers(47%).By contrast,in the Philippines,the percentage of gig-workers(70%)that ranked this concern first was higher than consumers(61%)and SM

142、Es(60%)(Figure 16).Figure 16Ranking of importance when deciding future financial providers,percentage of respondents ranking trustworthy proivder first,By segment,Regional and by country 56%56%56%49%46%48%51%47%65%61%60%66%64%68%70%62%36%50%59%54%53%Moving The Needle27Safety and security of the plat

143、formGood customer supportLocal dialect language supportOffering training programsSimplicity of user interfaceFlexibility provided by the service provderWide variety of productand service offeringsReduced time to onboardPresence in multiple countriesCost-effective servicesPopular brand in the local m

144、arketOther anciliiary services such asBNPL,discounts,rewardsTransparent operations4%4%4%4%5%2%6%6%5%2%5%3%5%8%3%12%16%14%59%50%64%1%1%1%1%0%0%2%1%0%2%2%1%0%1%0%2%1%1%With trust figuring so highly among respondents,both at the regional and at the country level,our survey then asked respondents to ran

145、k the reasons to trust an online platform.Here,safety and security of the platforms was the predominant consideration across all three segments:consumers(59%),gig-workers(50%),and SMEs(64%)at the regional level(Figure 17).Figure 17Ranking of important reasons to trust an online platform,percentage o

146、f respondents ranking first,By segment,Regional Moving The Needle28At a country level,safety and security of the platforms also had the highest percentage of respondents ranking this consideration as the most important reason to trust an online platform across all countries within each of the three

147、segments:consumer,gig-worker,and SMEs.But again,there was some variation in the relative degree.SMEs in Malaysia(67%),Thailand(67%),Philippines(72%),and Indonesia(71%),for example,ranked this factor higher than SMEs in Singapore(49%).Consumers in Malaysia(64%)and Indonesia(66%),meanwhile,ranked safe

148、ty and security higher than consumers in Thailand(51%),for example(Figure 18).Figure 18Ranking of important reasons to trust an online platform,percentage of respondents ranking safety and security of the platform first,By segment,Regional and by country 59%50%64%64%46%67%67%53%62%61%72%66%71%54%58%

149、59%38%49%61%43%51%Moving The Needle29DriversWith the pandemic accelerating the rate of digital transformation,criminals have followed where the money is going online.A report by Check Point Research reveals a 168%year-on-year surge in cyberattacks in APAC in 2021 as compared to May 2020.8 With the n

150、umber of digital devices for accessing the internet proliferating,the number of endpoints for cybercriminals to exploit has expanded.Media is now full of stories of people being defrauded.A case in point was the recent spate of phishing scams involving OCBC Bank where a total of S$13.7 million(US$9.

151、86 million)was lost.9 As the frequency of cyberattacks increases,public awareness of the dangers has grown.When people hear that yet another platform has been hacked,their anxiety around the safety and security of these platforms rises.ImplicationsThe implications are clear.When it comes to peoples

152、money,trust is paramount and trumps every other consideration.If financial inclusion is to be improved across the region,DFS providers need to invest heavily,both in resources and efforts,in helping to build that trust.That will largely boil down to how safe and secure their platforms are.Recommenda

153、tionsAs a result of the spate of phishing attacks,in January and June 2022,the Monetary Authority of Singapore(MAS)and the Association of Banks in Singapore(ABS)brought in measures to safeguard customers from digital banking scams.10 While banks in Singapore are mandated to have fully implemented al

154、l the measures by the end of October 2022,DFS providers across the region would also do well to implement them.Measures brought in by MAS and ABS that DFS providers should consider include:The requirement of additional customer confirmations to process significant changes to customer accounts and ot

155、her high-risk transactions identified through fraud surveillance Setting the default transaction limit for online funds transfers to S$5,000(US$3,600)or lower Providing an emergency self-service“kill switch”for customers to suspend their accounts quickly if they suspect their bank accounts have been

156、 compromised Enhancing fraud surveillance systems to take into account a broader range of scam scenarios Removal of clickable links in emails or SMSes sent to retail customers Threshold for funds transfer transaction notifications to customers to be set by default at S$100(US$72)or lower Delay of at

157、 least 12 hours before activation of a new soft token on a mobile device Notification to existing mobile number or email registered with the bank whenever there is a request to change a customers mobile number or email address Additional safeguards,such as a cooling-off period before implementation

158、of requests for key account changes such as in a customers key contact details Dedicated and well-resourced customer assistance teams to deal with feedback on potential fraud cases on a priority basis More frequent scam education alerts8 Jamilah Lim,TechWire Asia,“Cybercrime is rising,and APAC users

159、 can do more to fight it,”July 2021,https:/ Vanessa Paige Chelvan,CNA,“OCBC says S$13.7 million lost in phishing scams,up from S$8.5 million,“Jan 2022,https:/ 10 MAS,“Additional Measures to Strengthen the Security of Digital Banking,”June 2022,https:/www.mas.gov.sg/news/media-releases/2022/additiona

160、l-mea-sures-to-strengthen-the-security-of-digital-banking;MAS,“MAS and ABS Announce Measures to Bolster the Security of Digital Banking,”Jan 2022,https:/www.mas.gov.sg/news/media-releases/2022/mas-and-abs-announce-measures-to-bolster-the-security-of-digital-banking Moving The Needle30Traditional Fin

161、ancial Institutions Will Co-Exist with DFSFindingsRespondents across all three segments:consumers,gig-workers,and SMEs,concurred that there were a number of challenges with traditional banks.At a regional level,the predominant challenges across all three segments were:having to review too many produ

162、cts from different banks to find the right one,the application process taking too long,and too much documentation/paperwork required to apply.A large number of SMEs(44%)also agreed that terms and conditions were difficult to understand(Figure 19).Figure 19Challenges with current traditional banks,pe

163、rcentage of respondents,By segment,Regional Financial products aredifficult to understandTerms and conditions are difficult tounderstand/too much technical jargonI have to review too many products from differentbanks just to fine the one I am looking forThe application process takes too longToo much

164、 documentation/paperwork required to applyCustomer service is often less effective in answeringqueries/no dedicated business accnt managerNot being flexible to customize financialproducts based on individuals/my businessOften reject financial applications from SMEsLack of fee transparency30%32%35%35

165、%34%44%41%42%44%39%41%44%43%42%49%33%36%24%35%35%33%25%31%30%18%Moving The Needle31It is therefore unsurprising that all three segments wanted to see key improvements from traditional banks.The three segments were consistent in all wanting to see more efficient customer service and a more stable and

166、 secured platform.However,there was some divergence between SMEs,consumers,and gig-workers in terms of the order of importance of other expected improvements by the banks.As well as the two areas already mentioned,a higher percentage of SMEs(50%)over consumers(36%)and gig-workers(34%)agreed that the

167、re needed to be more consumer-friendly financial products.A higher degree of SMEs(46%)over consumers(32%)and gig-workers(28%)also agreed that they should be able to have different financial services in one platform/app.Meanwhile,a higher percentage of consumers(46%)and gig-workers(40%)over SMEs(22%)

168、prioritized full transparency on fees and charges.A higher percentage of consumers(42%)over gig-workers(35%),and SMEs(25%)also agreed that there should be more affordable financial products(Figure 20).The chart above shows a clear difference between SMEs,consumers,and gig workers expectations.For ex

169、ample,consumers and gig workers are more concerned about full transparency on fees and access to more affordable financial products,while SMEs are more concerned about simpler to understand products and processes,and the ability to have different financial services in one platform or app.Figure 20Ex

170、pectations of key improvements from banks,percentage of respondents,By segment,Regional More consumer-friendlyfinancial productsLess technical jargon interms and conditionsAble to have different financialservices in one platform/appLess tedious application processFaster approval for financialproduct

171、 applicationsMore efficient customer serviceMore stable and secured platformFlexability to customize financial productsbased on my needs/business natureEasy access to other financialservices/for every businessMore affordable financialproducts/for every businessFull transparency on fees and charges36

172、%34%50%30%29%41%32%28%46%29%28%35%39%49%43%42%44%47%44%46%39%39%30%39%37%27%42%35%25%46%40%22%39%Moving The Needle32While DFS providers have the potential to fill in the gaps where traditional FIs perform below expectations,there do,however,still exist a number of pain points with digital financial

173、technology services.The main concern across all three segments was around the security of the platforms.More than half of consumers(52%)and 46%of gig-workers highlighted this issue,while 44%of SMEs said that the security of the platforms was lacking.Over half of SMEs(53%)also said that the platform

174、is not stable and sometimes has down time,along with 40%of consumers and 38%of gig-workers(Figure 21).Figure 21Pain points with digital financial technology services,percentage of respondents,By segment,Regional Financial products aredifficult to understandTerms and conditions are difficult tounders

175、tand/too much technical jargonThe platform is not stable andsometimes has downtimeThe application process takes too longI have concerns with the security of the platformNot being able to speak to customer servicesCustomer services is often lesseffective in answering queriesLack of clarity on the pro

176、ducts being offeredLack of fee transparency28%29%32%33%40%38%21%29%52%46%34%31%31%35%36%35%29%30%Financial products aredifficult to understandTerms and conditions are difficult tounderstand/too much technical jargonThe platform is not stable andsometimes has downtimeThe application process takes too

177、 longI have concerns with the security of the platformNot being able to speak to customer servicesCustomer services is often lesseffective in answering queriesLack of clarity on the products being offeredLack of fee transparencySMEsMoving The Needle33DriversIncumbent banks have historically been som

178、ewhat shielded from competition,existing as oligopolies in highly regulated markets.These banks relied on economies of scale by pushing out generic,mass market products developed inhouse.As digital transformation and the focus on customer-centricity swept across other consumer industries,consumers s

179、tarted to expect the same customer experience from their financial service providers.Weighed down by legacy and perhaps a degree of complacency,the incumbents have been slow to respond.These,however,are now being challenged by new digital-first challengers that excel at personalization and customer

180、centricity.However,any provider who wants to offer a seamless,digital customer experience-regardless of incumbent or DFS provider-should pay careful attention to their platforms.Unstable,unsecure platforms,personal data thefts,and phishing scams are all too common occurrences for the financial indus

181、try as a whole.These risks need to be robustly managed,and prevented,in order to build user trust.ImplicationsWhile incumbents have been slow to deliver innovative customer-centric products,services,and interaction models,these are now belatedly responding to the shift in the competitive landscape a

182、nd changing customer expectations.Incumbents do undoubtedly still face challenges,ones that digital-first challengers have been able to exploit,but what they do have is familiarity,which has been built up over decades.Moreover,incumbents have now introduced digital services that are relatively good.

183、Many have also established their own digital arms.The implications here are that while digital-first challengers can play a very important role in filling the gaps where traditional banks are still underperforming,these simply do not have the familiarity element that bricks-and-mortar banks have bui

184、lt up over decades,if not centuries.For that reason,traditional financial institutions will not be displaced by DFS providers any time soon and will continue to exist alongside them.RecommendationsWhat is clear from our survey is that if traditional financial institutions want to compete with the di

185、gital-first challengers,they are going to have to focus on the areas where they are still falling short.That means streamlining their processes by reducing the number of documents required to apply for new accounts,products,and services,and approving financial product applications faster.It also mea

186、ns offering better personalized products and customer service,as well as simplifying terms and conditions and providing full transparency on fees and charges.Challengers,meanwhile,will need to focus on building up familiarity,trust and confidence.Challengers can focus on the areas where traditional

187、financial institutions have been weak historically,namely by ensuring that they are catering to the prioritized needs of their end-users which will differ by customer segment.For consumers and gig-workers,that will mean better customer service,adept at answering questions,full transparency on fees a

188、nd charges,and more affordable financial products.For SMEs,that will mean making it easier and faster to apply and be approved for financial services,having more business-friendly financial products,and simplifying terms and conditions.Critically,it will also mean offering a frictionless,seamless cu

189、stomer journey.For financial industry participants as a whole,focus on ensuring top-notch stability and security of their platforms will be critical.Moving The Needle34ConclusionWith a total population of almost 700 million people and a booming economy,which was valued at US$3.2 trillion in 2019,Sou

190、theast Asia is one of the most rapidly developing regions in the world and is set to become the worlds fourth largest economy by 2030.11 However,more than 70%of the adult population is either“underbanked”or“unbanked,”with limited access to financial services.12 With its high mobile phone penetration

191、 rates and large,tech-literate young populations,the region is well placed to benefit from the digitalization of financial services and bring down the barriers that have hitherto prevented greater financial inclusion.The accelerated take-up of DFS and payments during the pandemic therefore bodes wel

192、l.However,if even greater financial inclusion is to be achieved,DFS providers still have some gaps to fill.As our survey found,access and awareness among users still remains an issue.High fees,charges,penalties and rates of interest will have to come down,while value propositions will have to be mor

193、e clearly articulated.For the sizeable young population,DFS providers will also have to focus harder on the user experience that Gen Zs and Millennials have become accustomed to that is,a frictionless,seamless,personalized customer journey.Above all though,DFS providers must engender confidence and

194、build trust.While incumbent financial institutions clearly could be doing a lot better to provide a more customer-centric,personalized experience,what they do have is the familiarity in their brand.That is why DFS providers are not about to wholesale displace incumbent financial institutions any tim

195、e soon.Given that both new DFS challengers and incumbent financial institutions have something that the other needs innovative customer-centric services and consumer confidence respectively,it makes sense to follow a partnership approach.Indeed,this is already happening.Incumbents get access to inno

196、vative new products and services that would be timely and costly to develop inhouse and which they otherwise might not be able to cost-effectively offer their customers.Fintechs,meanwhile,get access to the brand name recognition,large customer base,robust infrastructure,capital,and the FIs license t

197、o provide regulated financial services.For DFS providers,given the diverse,fragmented nature of Southeast Asia,it also makes sense for these to follow a partnership approach if they want to scale up their impact in the shortest possible time.11 Worldometer,“South-Eastern Asia Population,”accessed 27

198、 June 2022,https:/www.worldometers.info/world-population/south-eastern-asia-pop-ulation;ASEAN Secretariat,“ASEAN development trajectories reach new milestone,”Aug 2021,https:/asean.org/asean-development-trajecto-ries-reach-new-milestone/;The ASEAN Post,Athira Nortajuddin,“The Future Of Consumption I

199、n ASEAN,”Nov 2020,https:/ Bain&Company,Google,Temasek,“Fulfilling its PromiseThe future of Southeast Asias digital financial services,”Oct 2019,https:/ Ratings,“South-East Asia Fintechs Path to Profitability Key as Adoption Gains Pace,”Aug 2021,https:/www.fitchrat- The Needle35This partnership minds

200、et should extend to policymakers as well,particularly as regional governments want to push for innovation in digital finance and drive adoption and usage,while keeping the whole network safe and the industry competitive.Areas where providers and policymakers can collaborate include:Co-developing rob

201、ust financial literacy programs and outreach programs that empower users with financial knowledge to make concerted and wise decisions about spending,wealth creation,and protection.DFS providers have rich data that allows for in-depth understanding of their customers motivations and behaviors,and th

202、ese insights can be valuable when designing literacy programs for different population segments.Jointly experimenting on development and roll-out of new,innovative digital finance solutions in a safe,controlled manner that is critical to building trust and promoting adoption among tech-agnostic popu

203、lation segments(e.g.,through regulatory sandboxes where regulators permit industry players to test and prototype innovative new products before regulatory frameworks governing their safe use are developed and enshrined).Regulators seeking advice and recommendations from select leaders of banks,payme

204、nt services providers,industry bodies,and businesses on a formal and regular basis(e.g.,through an industry coordination body,similar to MAS Payments Council)on developing the DFS industry and driving pervasive adoption of DFS,or to jointly develop codes of conduct(e.g.,similar to the BNPL Working G

205、roup in Singapore).Governments partnering with DFS providers to disburse government support vouchers to encourage adoption of e-payments at both the SME and consumer levels(similar to Grabs ePenjana and ePemula efforts in Malaysia).Governments working with the industry to promote interoperability am

206、ong DFS solutions,particularly in countries with fragmented e-payments solutions,through integrating them with individual and business use cases.Policymakers can also encourage the development of low-cost,innovative financial products.The underserved face unique obstacles and have unique financial n

207、eeds.Policymakers can establish regulatory frameworks that encourage the development of appropriate financial products,such as basic bank accounts and microinsurance,that address the needs of underserved,low-income customers.Customer-centric product designs that are fractionalized and easy to unders

208、tand will help to overcome behavioral barriers and increase utility.Ultimately,if policymakers,DFS providers,and incumbent FIs all work together,these can go a long way in overcoming the obstacles preventing further financial inclusion within the region.Moving The Needle36Appendix0%10%20%30%40%50%60

209、%70%80%ConsumersGig-workersSMEsTotalConsumersGig-workersSMEsTotalConsumersGig-workersSMEsTotalConsumersGig-workersSMEsTotalConsumersGig-workersSingaporeVietnamThailandPhilippinesGeneral bankingPaymentsInvestingInsuranceBorrowing MoneyFigure 1 Percentage of respondents that used DFS a lot more or com

210、pletely switched during the pandemic,By product,segment,and countryMalaysiaGrab operates across the deliveries,mobility and digital financial services sectors in over 480 cities in eight countries in the Southeast Asia region Cambodia,Indonesia,Malaysia,Myanmar,the Philippines,Singapore,Thailand and

211、 Vietnam.Grab enables millions of people each day to access its driver-and merchant-partners to order food or groceries,send packages,hail a ride or taxi,pay for online purchases or access services such as lending,insurance,wealth management and telemedicine,all through a single“everyday everything”

212、app.Grab was founded in 2012 with the mission to drive Southeast Asia forward by creating economic empowerment for everyone,and since then,the Grab app has been downloaded onto millions of mobile devices.Grab strives to serve a triple bottom line:to simultaneously deliver financial performance for i

213、ts shareholders and have a positive social and environmental impact in Southeast Asia.Please visit https:/Kapronasia is a leading strategic consultancy covering fintech,banking,payments,and capital markets.From our offices and representation in Shanghai,Hong Kong,Taipei,Seoul,and Singapore,we provide clients across the region the insight they need to understand and take advantage of their highest-value opportunities in Asia and help them to achieve and sustain a competitive advantage in the market.Please visit https:/ 2022 Kapronasia Singapore Pte.Ltd.All rights