Chinese banks could reap an additional USD$63.4 billion in revenue by the end of the decade should they use Fintech to shore up financial inclusion,and tap customers who continue to lack ready access to financial services.
EY said last week that like their international banking sector peers, Chinese banks have yet to fully capitalise upon the growth opportunities presented by financial inclusion as fostered by the latest Fintech initiatives.
According to EY financial inclusion represents potential revenue of $200 billion across 60 countries, including $88 billion in the Asia-Pacific, $63.4 billion in China, $8.5 billion in Thailand and $5 billion in Vietnam.
“Financial inclusion isn’t merely a corporate responsibility goal, it’s a strategic growth opportunity for financial institutions across emerging markets in Asia-Pacific,” said Jan Bellens, head of global emerging markets at EY.
Bellens warned that if banks failed to make haste to capitalise this potential, they could cede ground to more tech-savvy upstarts.
“If banks do not capture this profitable growth opportunity, the gap will be filled by innovative non-bank institutions.”
Key means for Chinese banks to use Fintech to expand financial inclusion will include mobile adoption and e-payments, national digital identity systems, open access to digital data and currency digitisation.
EY also points to the need for policy measures and systemic drivers to provide safeguards and incentives that will foster innovation amongst banks, telecommunications providers and Fintech companies.