Driving financial inclusion in South-east Asia

A NEW wave of digital evolution is expected to shake up the status quo in the financial sector and fintech is poised to bring about a sea change in emerging economies. South-east Asia is one region with immense potential for growth in financial services due to its large unbanked population; countries like Indonesia, Thailand and Vietnam are still using cash only for about 99 per cent of transactions, and many people have no access to financial services such as banking, credit and savings.

Some 64 per cent of the population in Indonesia is not served by any financial institution, while Thailand and Vietnam have an unbanked population of around 70 per cent each. Conversely, the region is experiencing a digital transformation that has led to high rates of mobile phone adoption (including both feature phones and smartphones) - 126 per cent in Indonesia, 122 per cent in Thailand and 152 per cent in Vietnam. This presents an opportunity to change the way these populations manage their monies; but before this can be leveraged, improving financial literacy and access to the right technology must be a cornerstone in facilitating financial inclusion.

Financially excluded communities are deprived of both knowledge and the means to save, transfer and borrow money securely. Raising consumers' awareness of the benefits and risks of financial services is the first step to financial inclusion.