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Digital Changes to Better Shape Asean Economy

Digital Changes to Better Shape Asean EconomyDigital Changes to Better Shape Asean Economy

Member states of Asean must be ready to embrace technological transformation to take advantage of the opportunities from digitization, according to HSBC Malaysia.

In a press statement on Friday, the bank’s retail banking and wealth management country head Lim Eng Seong said that the growing importance of digital innovation will shape the next wave of economic development in Asean, which turns 50 years old this year, Bernama reported.

He noted that countries in the regional bloc must be quick, bold and flexible to adopt digital transformation moving forward. “Asean is primed for a digital future which will shape the next wave of economic development.

“It is easy to see that Asean’s young consumers, just like their millennial counterparts in China, the United States or Europe, are highly likely to want to incorporate online and mobile innovation into multiple aspects of their lives.

“It’s already clear that people in the region are receptive to digital tools. A recent HSBC survey found that four in five home buyers in Malaysia, for example, used online channels to research their recent property purchase, and over three-quarters went online for financing options,” said Eng Seong.

Despite the member states’ varying economic and infrastructure development levels, HSBC Malaysia opined that Asean holds some of the same potential that can already be witnessed in China.

With a cumulative population of nearly 630 million people, Asean’s population is one of the world’s youngest. Disposable incomes are also gradually rising in much of the region.

To note, Asean is expected to have some 125 million middle class households by 2025–roughly double the number in 2010.

“All this means is that for businesses, bankers and investors, Asean offers a large, dynamic and eager consumer base–and one they can tap and service increasingly easily via digital tools and mobile handsets.

 “Some Asean governments are working to enable innovation. Singapore, for example, is leveraging its status as an established financial center to take a leading role in fintech development, with support from the Monetary Authority of Singapore.

“Bank Negara Malaysia is leading the implementation of the new payment infrastructure for faster payment called Real Time Payment Platform with the objective to make all payments real-time, facilitates person-to-person payment and spur innovations,” Lim added. Asean’s combined gross domestic product stood at $2.55 trillion in 2016 with a robust year-on-year real GDP growth rate of 4.7% despite the challenging global environment.

This growth in the region’s economy is expected to accelerate to 4.8% in 2017, supported by solid growth of private consumption and investment as well as expansionary fiscal policy.

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