Jan 23, 2025

Pockets of opportunity in Asia’s large and growing banking sector favour institutions that pursue both growth and efficiency as they tailor offerings to clients’ needs. Get the hottest Fintech Singapore News once a month in your Inbox The Asian banking sector in 2025 is set to roar as it stands at the forefront of a global transformation in financial services. With annual revenues from corporate and investment banking (CIB) exceeding USD $1.4 trillion , the region commands nearly half of the world’s CIB revenues. Currently, it is also projected to sustain 7% annual growth through 2027. According to Fitch Ratings , Asia’s banking landscape has been reaping the benefits from the stabilising interest rates and positive economic momentum, with pockets of opportunity emerging across diverse markets. Transaction banking, which includes cash management and trade finance, has also been pivotal in driving growth and deepening client relationships across Asia. Additionally, private credit’s rise in Asia’s financial markets offers an exciting avenue for innovation and competitive positioning. Following a recent webinar on Cracking the Code of Asia’s Banking Trends in 2025 and Beyond , we’ve invited some notable players in the financial landscape to walk us through the latest up-and-coming trends within the banking sector in this region. The Asian financial landscape is being revolutionised at lightning speed by innovation. However, amidst this whirlwind, distinguishing actionable trends from the noise is becoming more and more challenging. Emphasis on Profitability and Growth To begin the 2025 list of top banking trends in Asia, we first must take a look at what drives banks the most—profits and growth. The journey towards profitability and sustained growth has always become a central theme for digital banks, not just in Asia but also across the globe. Jessica Lam, Group Chief Strategy Officer at WeLab, highlighted that, after years of financial discipline during challenging market conditions (especially during the COVID-19 era), banks are now positioned to focus on scaling their operations. She noted that stabilised markets have created an environment ripe for expansion. This is where institutions can confidently invest in new technologies and enter untapped markets. Jessica remarked, “Now that many of us have proven the proof of concept works, the next step is scaling up responsibly.” Jessica Lam, WeLab This transition signifies a shift from merely surviving economic turbulence to thriving by leveraging improved financial frameworks and consumer trust. Furthermore, many banks are now exploring strategic partnerships and collaborations, particularly in Southeast Asia, to accelerate growth and streamline operations. Hyper-Personalisation Through AI As seen in the top 5 trends shaping the fintech scene in Singapore , AI has been the talk of the town for the banking sector since it first shared its limelight back in 2020. This came as no surprise, as Artificial intelligence (AI) has the ability to create highly personalised banking experiences Albert Tinio, Co-CEO of GoTyme Bank Philippines, emphasised that AI’s potential lies in its ability to understand individual customer behaviours and preferences at an unprecedented scale. This enables banks to offer bespoke financial solutions tailored to the specific needs of each customer. By doing so, they enhance satisfaction and loyalty. Albert elaborated, “We’re now able to create hyper-connected ecosystems where data shared securely can benefit the end customer.” Such hyper-connectivity is not limited to financial services. It also extends across industries, enabling seamless integration of financial tools into everyday activities. Meanwhile, Taruni Ramamurthi, Head of FSI Malaysia and Philippines at Amazon Web Services, underscored the ethical considerations of AI deployment. Taruni Ramamurthi, Amazon Web Services She stated that AI should be a tool to enhance human-centric banking, ensuring customer trust remains intact. With AI being widely adopted for fraud detection, compliance, and customer engagement, banks are focusing on ensuring transparency and accountability. These efforts aim to build and maintain consumer confidence. Generative AI applications are also gaining traction, allowing banks to automate complex processes such as risk analysis and predictive modelling. This, in turn, improves efficiency significantly. Open Banking and Collaboration Open banking is also gradually becoming a reality across Asia, albeit at varying levels of adoption. Albert highlighted the slow but steady progress in the Philippines. Regulators are working to ensure that consumer consent and data security are prioritised. “For open banking to succeed, all institutions need to embrace collaboration and share data responsibly,” Albert stated. Albert Tinio, GoTyme Bank Philippines This collaborative model allows customers to access a consolidated view of their financial information, enabling them to make more informed decisions. Open banking also fosters innovation, as fintechs and third-party providers can develop new products and services through secure API integrations. Jessica echoed these sentiments, adding that the true potential of open banking lies in its ability to create a more inclusive financial ecosystem. Open banking could drive significant advancements in financial inclusion across underserved markets. All of this can be made possible by lowering barriers to entry for new players and promoting interoperability. Branches Reinvented The debate surrounding the relevance of physical branches in the digital era continues. However, their role is undoubtedly evolving. Taruni described branches as becoming “experience centres” designed to address specific customer needs, such as financial education and community engagement. In regions like Southeast Asia, where access to the internet remains uneven, branches serve as critical touchpoints for unbanked populations. Jessica also weighed in on the transformation of branches, stating, “The purpose of branches should evolve to complement digital offerings, creating seamless customer experiences.” She suggested that future branches could blend digital tools with personalised human interactions to bridge the gap between traditional and digital banking. For instance, branches could host financial literacy workshops or offer specialised advisory services for small businesses. This approach fosters deeper customer relationships. Adding to this global shift, some Hong Kong digital banks are rethinking their strategies and considering physical branches following the HKMA’s recent rule change, as reported by the South China Morning Post (SCMP). This change, aimed at supporting growth, allows for limited physical branches and has prompted digital banks like WeLab Bank, ZA Bank, and Mox Bank to explore offline strategies. While Livi Bank remains fully digital, other players see this as an opportunity to enhance trust and customer experience through face-to-face interactions and advisory services. Traditional banks in Hong Kong are also adapting by focusing on prime locations to attract wealth-management clients or integrating hybrid models, blending sustainability and digital-forward designs. Such evolution highlights how branches are increasingly becoming versatile touchpoints that cater to both digital natives and those who value in-person banking experiences. In addition, Frankie Wai, Business Solution Director at Temenos, mentioned that technology can further enhance the utility of branches. Features like biometric authentication and AI-powered kiosks could make in-branch services more efficient and appealing to tech-savvy customers while still catering to those who prefer face-to-face interactions. Frankie Wai, Temenos Regulatory and Ethical Challenges As the banking sector embraces technological advancements, the importance of ethical considerations and regulatory compliance is becoming increasingly apparent. Frankie stressed that transparency and accountability must underpin the adoption of AI and open banking. “Regulators are increasingly focusing on ensuring that technological advancements are used responsibly to safeguard consumers,” he said. One key area of concern is data privacy. With the rise of open banking and AI-driven insights, banks are handling vast amounts of sensitive customer information. This requires robust security measures and clear guidelines to prevent misuse. Furthermore, regulators across Asia are introducing frameworks to govern the ethical use of AI. These frameworks aim to ensure that algorithms do not perpetuate bias or discrimination. Payment Innovation and Cross-Border Collaboration The payments sector is undergoing significant transformation, with cross-border interoperability emerging as a major focus area. Frankie also highlighted Asia’s adoption of global payment standards like ISO 20022. These standards enable seamless and transparent regional transactions. He believes that collaboration across borders will redefine how SMEs and individuals engage in international commerce. Projects such as Nexus , which aim to link payment systems across countries, are poised to create a unified regional payment ecosystem. These advancements not only facilitate trade but also empower micro, small, and medium enterprises (MSMEs) to expand their reach. Taruni added that such innovations could be instrumental in driving financial inclusion, particularly for women entrepreneurs and underserved communities. Additionally, the integration of AI in payment systems is streamlining operations, enhancing fraud detection, and improving user experiences. From biometric authentication to real-time transaction monitoring, these advancements are setting new benchmarks for efficiency and security in the payments landscape. The Asian Edge The trends show that the banking sector in Asia in 2025 reflects a unique confluence of rapid growth, innovation, and challenges that set it apart from other regions. The region’s CIB market is growing faster than any other globally, with SMEs and green infrastructure investments acting as pivotal drivers. However, these opportunities exist alongside persistent risks such as volatile real estate markets in China and regulatory uncertainties. Comparatively, while Western economies focus on streamlining mature banking systems, Asia’s landscape requires a nuanced approach to cater to diverse markets and evolving customer expectations. The ability to balance technological advancement with ethical practices will be critical. Asia’s banking leaders are well-positioned to redefine the global narrative, focusing on financial inclusion, sustainability, and innovation. Institutions that adopt agile strategies and invest in cutting-edge technologies are likely to outpace their competitors, shaping the region’s banking landscape for decades to come. In this pivotal era, Asia is not merely adapting to global banking trends but rather defining them. The top banking trends in Asia showcase how the region is leveraging innovation to transform its financial landscape. With advancements in AI, open banking, and cross-border payments, Asia is setting benchmarks for global banking practices. Catch up on the Cracking the Code of Asia’s Banking Trends in 2025 and Beyond webinar to dive deeper into the trends that are redefining the financial landscape in Asia. Featured image credit: Edited from Freepik