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Three ways banks in Asia can compete with non-bank players
There is no question that banks globally are aware of the threat posed by non-bank players. With minimalist and appealing front-end designs, these non-traditional players have been shaping the way consumers conduct daily transactions by integrating payments into commerce. The likes Amazon and Apple for example have streamlined the payments process by allowing a one-step authentication for the purchase of goods.
Darryl Yu 26 Nov 2015
There is no question that banks globally are aware of the threat posed by non-bank players to their business. With minimalist and appealing front-end designs, these non-traditional players have been shaping the way consumers conduct daily transactions by integrating payments into commerce. The likes of Amazon and Apple, for example, have streamlined the payments process by allowing a one-step authentication for the purchase of goods.
It’s a similar story in Asia where apps such as WeChat have been reshaping the customer payments experience. With 549 million monthly active users, the Chinese app’s digital wallet service has been used for a wide range of activities such as paying bills, hailing cabs and buying movie tickets.    
Losing control of the customer relationship is one of the main issues that banks have with new front-end facing digital platforms. Just like how messaging app services such as WhatsApp and Viber use the “pipes” of the telecom companies, banks fear that they could be reduced to being only back-end money movers. The race to win the customer relationship is more apparent in Asia Pacific (Apac) where payments are predicted to rapidly rise. Consulting firm McKinsey & Company expects Apac payment revenue to reach US$1 trillion by 2019 compared to US$700 billion recorded in 2014.   
With all these new opportunities and threats emerging in the region, banks in Asia-Pacific have been responding in various ways to stay relevant to their clients:
In-house development
In Australia, Commonwealth Bank of Australia (CBA) introduced “Albert” a tablet device that has allowed merchants manage their finances effectively via special apps that allow automatic reconciliation of payments and visibility on company cash flow. CIMB bank in Malaysia developed the “Plug n Pay” service that allows companies to collect payments on the go via a card reader device.   
Partnering with technology firms  
Just this May, India’s third largest private sector bank, Axis Bank joined forces with Singapore-based company Fastacash to form “Ping Pay” an app that allows registered users to transfer money via the popular messaging services such as WhatsApp and Facebook. “Launch of Ping Pay, a unique multi-social payment solution is yet another milestone in our journey to offer digital solutions to our customers,” says Rajiv Anand, group executive and head of retail banking in a statement. “Our focus has always been to provide customers with innovative products and services with a distinctive user experience.”
Incubating startups  
In search of new ideas to potentially spice up their own digital product offerings, banks operating in Asia such as Citi and DBS have invested into finding and developing start-ups. In November, both banks had their demo days in Hong Kong, a rare opportunity for their selected companies to present their solutions to an audience of investors and financial executives. It was a glimpse into how some banks are taking a proactive approach to finding the next new trend.

Having been a part of Citi for 21 years, Francisco Aristeguieta, Asia Pacific CEO at Citi reflected on the change technology has had on banking, “Back then technology was developed very differently. I’ve seen a 180 degree change in how technology is developed and embraced,” he says. Today for us at Citi it’s all about the customer experience. It is a race to improve our clients’ experience and engagement model.”  

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