Defining the Next Decade of MSME Digital Banking In Southeast Asia

indonesia-flagIndonesia /Malaysia-flagMalaysia /Philippines-flagPhilippines /
Singapore-flagSingapore /Thailand-flagThailand /Vietnam-flagVietnam
The current landscape in Southeast Asia (SEA) offers traditional banks and financial institutions a real opportunity to evolve into a complete ‘financial OS’ that meets the emerging digital banking needs of MSMEs. Our report highlights the following tailwinds for digital banking evolution:
Growth in internet economy: 2021-22 has been a period of recovery and resurgence for the region, and the SEA internet economy is expected to grow at 20% CAGR to touch USD 360 Bn GMV by 2025.
MSME digital footprint: MSMEs have digitalised their trade, operations and back-offices creating deep data footprints that banks can use. This trend will only rise further, with 49% MSMEs in Indonesia and Thailand planning to increase adoption of operational software in the next 5 years.
Supportive policies & infrastructure: Enabling policies and digital infrastructure make the MSME segment ripe for modern digital banking services; all six surveyed markets have operational regulatory sandboxes, while three (Singapore/Philippines/Indonesia) have operational Open Finance frameworks in place.
Rapid innovation in fintech capabilities: Modern tech stacks and digital infrastructure for payments and open finance are fuelling innovation in fintech-powered solutions for MSMEs. The report presents a framework for solutions that combine banking products with financial automation to help MSMEs run and grow their businesses.
Surging demand for digital solutions: The MSME segment demand for digital and embedded banking services is expected to skyrocket. Data shows that 81% merchants in Vietnam plan to increase their use of digital payments, while 53% merchants there plan to increase use of digital lending.
Download the report for specific insights on each of the six markets: Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam.
The report is organised in four main sections
Digital Evolution of MSME Sector
Diversity in the MSME segment in terms of size and digital propensity
Emerging MSME niche segments
Market opportunity size
Emerging fintech trends fuelled by MSME digital adoption
MSME Digital Banking Opportunity In Southeast Asia
MSME market size & digital banking regulatory infrastructure across the six markets
Digital banking outlook in each market driven by digitalisation of consumers, economy, business operations & finance
Opportunity size across digital payments, digital banking, lending and embedded finance in each market
MSME Digital Banking Use Cases
Deep dive into trending MSME digital banking fintech solutions across 5 key business lines : cards & expense management, payments, digital banking, business financing, revenue based financing
Market readiness heatmap
Use case trends and challenger case studies
Accelerated Digital Banking Adoption for Banks
Framework for MSME focused product innovation
Approach for accelerated digital banking innovation in banks and financial institutions
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