Challenger Banks: New Propositions for a New Age of Finance

Challenger Banks: New Propositions for a New Age of Finance

This document discusses the proliferation of digital banking in the Asia/Pacific region that is driven by technological advances and regulators that have lowered the barrier of entry to the banking industry. IDC profiled several digital banks and the type of technology used in demonstrating how a digitally native agenda is executed, paving the way for traditional banks to follow suit. The report also highlights the role of these new type of banks in increasing financial inclusion, particularly across Asia/Pacific in which a significant number still do not have access to financial services."With several digital banks set to launch across Asia/Pacific over the next t years, we will witness an era of banking driven by customer centricity. Digital banks will endeavor to address any gaps left by traditional banks in convenience and efficiency. As more fintechs start their journey into offering financial services, we will see them adapting third-party functionalities into their ecosystem via open application programming interfaces (APIs) that will facilitate more data sharing — a crucial move in creating a truly personalized digital banking experience. Although challenger banks will likely not grow to be dominant in the retail banking sector, they will gain sufficient ground in markets in which their value proposition resonates with market needs, as well as in a rising digitally inclined generation that will embark on their banking journey in the coming years."

Please Note: Extended description available upon request.

Executive Snapshot
Situation Overview
Scope of Work
Challenger Banks
Traditional Banks
Brief History
State of Regulator Readiness in Asia/Pacific
South Korea
Hong Kong
Challengers' Deployment of Advanced Technology
Modular Core Banking System
Cloud Considerations
Frictionless Digital Onboarding
Instant Credit Decision Making
AI and ML
Challengers' Tech Partners
What Challengers Do Best
WeBank — China
Outstanding Areas
kakaobank — South Korea
Outstanding Areas
Xinja — Australia
Outstanding Areas
Winning Traits for Challenger Banks
Superior UI and UX
Gamification in Banking
The Infiltration of Fintechs into Banking
Ecosystems as the Key to Success
Profitability and Sustainability
Interest Rate Pricing — Tactical Decisions
Blue Ocean Strategy in China
Can Their Successes Be Replicated?
The Potential for Growth in Asia/Pacific
Other Considerations as Seen in South Korea
Nontraditional Revenue Streams
Challenges Ahead
Competing Head to Head with Incumbents
Customers' Propensity to Switch
Building Customer Trust in a Digital Age
Integration into the National Credit Scoring Ecosystem
Advice for the Technology Buyer
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