Over 200m new mobile banking users forecast in four APAC markets by 2023: report

THE number of mobile banking users in four Asia-Pacific (APAC) countries - India, Indonesia, the Philippines and Vietnam - could increase by some 209 million in three years by 2023, according to latest forecasts by international financial group UnaFinancial.

This would represent a striking 75 per cent increase, from the 278 million mobile banking users in the same countries as at 2019.

The heavyweight of the group is India, where 142 million new users are forecast to emerge, compared to 180 million as at 2019. This would mean a total of nearly 322 million mobile banking customers from India alone.

Meanwhile, Indonesia's users are forecast to grow by 36 million to 88 million in total. The Philippines is expected to add 16 million users, to reach a total of 41 million, and is closely followed by Vietnam, which could add 14 million users, to reach 36 million.

UnaFinancial's forecast first assumes the share of mobile banking app users in these countries (of total Internet users, aged 16 to 64 years) continues to grow at a baseline of 4 per cent annually, in line with growth rates between 2017 and 2019.

On top of baseline growth, the Covid-19 pandemic is estimated to account for an additional 5 per cent of Internet users adopting mobile banking in 2020 alone - an estimate derived from prior research by Capgemini.

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Finally, the expected acceleration of digitalisation in the region's financial sector is estimated to add between 1 per cent and 3 per cent in annual growth - with the fastest growth anticipated in the Philippines, where new players ("neobanks") are launching this year and next.

If these projections are borne out, between 52 per cent and 62 per cent of Internet users in these four markets will have adopted mobile banking by 2023.

Mobile and tablet Internet usage first exceeded desktop traffic in 2016. Today, there are an estimated 3.5 billion smartphone users in the world, able to access "mobile-first" services on the go.

The pandemic is also likely to have accelerated overall "offline-to-online" trends, including in banking. Earlier this year, the Boston Consulting Group reported that 24 per cent of customers surveyed in April across 15 markets planned to use physical bank branches less or stop visiting them completely.

Whether online or offline, UnaFinancial's report found that the developing countries of the Asia-Pacific have yet to realise their potential to provide their vast populations with access to banking services.

The main reasons cited are complex geography, a large share of the rural population with low and unconfirmed incomes, a high level of informal employment, and a large number of young people who thus lack credit history.

At the same time, the report noted that the growth of mobile banking in developing Asian countries has been exceeding the global average. The average daily time spent on a smartphone in Asia-Pacific countries is three hours and 22 minutes, which significantly exceeds levels in Europe and America.

As more users in the region turn to mobile banking, more challengers are also entering the market fray. UnaFinancial said in its report that both traditional and digital banks are becoming increasingly interested in emerging markets, a trend that is set to continue in the near future.

The report also noted that as a regional financial hub, Singapore has already issued the first digital banking licences, which will "spur macro-regional expansion". Regionwide, 100 new financial institutions are expected to appear by 2025, while three in five clients are projected to use digital apps by neobanks and challenger banks.