Over the weekend, I received a couple of interesting emails about things happening in Asia.
The first is a translation of an announcement from the People’s Daily, the most official newspaper of the Chinese Communist Party, discussing digital currencies. The article is fairly high level and makes no commitment to regulate, deregulate or commit to a super-sovereign Chinese digital currency , but there is one line in the translation that caught my attention:
“Despite that digital currency system is flawed for the moment, it still can be a valuable experiment, especially for an exploration on super-sovereign currency.”
The implication, as has been reported before in the last month, is that China is open to the idea of a digital currency, as long as it’s ‘efficient and safe’.
The second is the triannual update from McKinsey on financial trends in Asia. This year’s customer insights from McKinsey’s Asia Personal Financial Services (PFS) survey reveal that, since 2014:
- digital banking penetration has grown 1.5 times to 3 times in Emerging Asia
- the median for Developed Asia is around 97 percent, and 52 percent for Emerging Asia
- Smartphone banking penetration has grown at a faster pace than overall digital banking, jumping two- to four-fold in many Emerging Asian markets
- with 30 to 50 percent of those not using digital banking expressing the likelihood that they will eventually make the switch, growth in digital banking penetration is expected to accelerate in Emerging Asia
- the percentage of digitally active customers (those who use digital banking at least every fortnight and have made e-commerce purchases in the last six months) has grown significantly since 2014, doubling in Emerging Asia (to 25 percent of the population) and growing 1.2 times in Developed Asia (to 85 percent of the population)
- bank branches now account for only 12 to 21 percent of monthly transactions
- 55 to 80 percent of customers in Asia would consider opening an account with a branchless digital-only bank; and those willing to bank digitally would be willing to shift between 35 to 40 percent of their total wallets to the digital account
- in Korea, the 40-million strong social chat service Kakao launched Kakaobank, and acquired one million customers within the first five days
- Kakaobank also raised up to $3.6 billion in deposits and issued over $3 billion of loans in the first 100 days
- Kakaobank is the fastest-growing mobile bank in the world with over 5.5 million users, $6 billion in deposits, and over $5 billion in loans issued as of February 2018
The 2017 survey covered about 17,000 urban banked respondents in Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.
Between these two updates, I continue to be in awe of the rapid move to digital finance in Asia, the pace of that move and the somewhat dull Western markets by comparison.