Asia-Pacific (APAC) banks stand as crucial pillars of the global economy, driving revenue and ensuring economic stability across the region. As titans of the financial ecosystem, they are at the forefront of purpose-driven innovation, adeptly navigating a fast-changing landscape.

The “APAC Banking Titans 2024” report, developed in collaboration with F5 provides invaluable insights into how 55 leading banks across APAC are transforming into technology-driven companies (TechCos).

These institutions are not only driving financial growth but are also leading purpose-driven innovation.

Twimbit Purpose Index

The Twimbit Purpose Index benchmarks these banks across five pillars: customer experience (CX), employee experience (EX), partner experience, planet impact, and shareholder value, offer a strategic roadmap for growth in the evolving financial landscape. It emphasizes serving all stakeholders equally:

1. Customer experience: Deliver exceptional customer experiences through digital innovation.
2. Employee experience: Create a fulfilling and supportive workplace for employees.
3. Partner experience: Foster transparent and collaborative partnerships for growth.
4. Planet impact: Promote sustainable practices benefiting society and the environment.
5. Shareholder value: Drive consistent and equitable value for shareholders​

This balanced approach ensures that banks can achieve profitability while making a positive societal impact.

Executive Summary

In an era where technology and purpose converge, banks are evolving into tech companies (TechCos) to innovate and deliver exceptional experiences to all stakeholders. We saw adoption of AI, journey-centric thinking, reduction in cost and open finance partnership as top priorities in 2023.

APAC’s leading banks have shown double-digit growth in their net revenues (ex. China and Malaysia) showing progress towards commercial dynamism and resource efficiencies.

This commitment to purpose aligns with the Twimbit Purpose Index, now in its third edition, guiding APAC’s top 55 banks in becoming purpose-driven organizations.

1. There are 55 banks in the index with 10 new entrants.
2. Norinchukin Bank has the highest growth score and EBITDA margin.
3. DBS leads with the highest purpose score for the third time in a row.
4. Singapore, Australia, Thailand, and India are growth leaders in 2023.
5. Norinchukin Bank is the leader in net revenue growth followed by Union Bank (Philippines) and Bank Mandiri.
6. Australia is the leader for ICT spending to revenue in 2023.
7. Chinese banks (ICBC, BOC, ABC and CCB) are the largest banks with the highest revenue size and strong profitability.
8. Singapore and Australia continue to hold their position as leaders of purpose-driven banking.

Financial highlights for FY2023

1. Net revenue growth for top 55 APAC banks demonstrated resilience amidst global economic uncertainties, standing at a median average of 4.54%.
2. APAC banks’ median net profit growth is at 11.11%.
3. The average cost efficiency of 49 analysed APAC banks improved by 6 basis points to 44.44%, reflecting a concerted effort across the region to optimize operational costs and enhance profitability.
4. Net fee income for banks across APAC experienced a notable decline of 4.29%. The aggregate net fee income decreased from USD 165.24 billion in 2022 to USD 158.15 billion in 2023.
5. The average fee income to revenue ratio reported by the top 55 APAC banks analysed stood at 17.5%.
6. Average Net Interest Margin (NIM) reported by the top 55 APAC banks analysed saw an increase of 4.29%, rising from 3.04% to 3.17%.
7. The banks recorded an average Current Account Savings Account (CASA) ratio of 54.21%, a decline of 243 basis points.
8. ICT spend is growing YoY across the region with the exception of South Korea. The total ICT expenditure for the 45 banks analysed grew from USD 26.5 billion in 2022 to USD 30.1 billion.

APAC’s leading banks prioritized building competitive advantage with AI

APAC banks are embracing transformative strategies to unlock growth. The adoption of AI has been one of the top priorities for banks to build a competitive edge in the market.

1. Over 80% of banks now utilize Artificial Intelligence (AI) to enhance customer experience (CX).
2. 40% of customer interactions are AI-enabled.
3. Banks are leveraging advanced algorithms to analyse vast amounts of customer data, enabling hyper-personalized product recommendations and services
4. The integration of AI-driven analytics is enhancing operational efficiency by automating decision-making processes and optimizing resource allocation.
5. Generative AI tools are being deployed internally to support employee productivity.
6. Banks are pioneering new service delivery models using conversational agents powered by natural language processing.

• Leading banks in focus

1. DBS has implemented over 100 AI/ML algorithms, delivering 30 million personalized nudges monthly to over 3.5 million customers. Additionally, the bank launched DBS-GPT, a generative AI tool, to enhance staff productivity, benefiting 5,000 employees.
2. CBA’s Customer Engagement Engine (CEE) uses AI to make over 35 million decisions daily, providing personalized customer experiences and assistance like loan deferments. The bank also has a Bill Sense feature which predicts bills up to 12 months ahead to help customers manage expenses.
3. OCBC launched OCBC GPT, a generative AI chatbot powered by Microsoft Azure, for 30,000 global employees in November 2023 to enhance productivity in tasks like writing and research. After a successful trial, participants reported completing tasks 50% faster.

Deliver exceptional customer experiences

1. Digital-only banks are emerging as formidable players by offering seamless online experiences that cater to tech-savvy customers.
2. Cloud technology is revolutionising banking operations by enabling agility and scalability.
3. Physical branches are being reimagined as experiential hubs that blend digital innovation with personalised service.
4. As cyber threats become increasingly sophisticated fortifying defences paramount ensuring safe secure experiences.
5. Contact centres are transforming next-gen care integrating AI-driven chatbots and virtual assistants to handle routine inquiries efficiently, freeing human agents to focus on complex issues.

• Leading banks in focus

1. BOQ’s fully digital bank: ME Go is a fully digital bank offering quick mortgages and online deposits, with account setup and transactions completed in under five minutes.
2. NAB’s cloud migration: Migrated 77% of applications to the cloud, aiming for 83% by 2024, with a 17% reduction in critical incidents and 99.89% availability for top services.
3. OCBC’s smart branch: Launched “Future Smart Branch,” combining banking with lifestyle elements, including family-friendly spaces and digital advisory services.
4. DBS’s Arculus for data security: Arculus is an in-house data policy engine that enhances data privacy and security while supporting regional expansion.

Create a fulfilling and supportive workplace for employees

1. Banks are leveraging digital tools to streamline workflows, enhance communication, and provide employees with seamless access to resources.
2. Banks are investing heavily into continuous learning development programs to ensure workforce remains agile and future ready.
3. Recognizing the importance of holistic well-being, banks are fostering environments that prioritize mental health, physical wellness, and work-life balance.
4. Banks are committed towards diversity inclusion and creating equitable workplaces where diverse perspectives are valued and celebrated.

• Leading banks in focus

1. BOQ’s Sonder: Launched a digital platform for employee wellbeing, offering 24/7 psychosocial, medical, and safety services, with usage increasing fivefold.
2. SCB’s People Analytics: Utilizes Microsoft’s Power BI for data-driven HR decisions, improving talent identification, risk mitigation, and workforce planning.
3. Union Bank’s UBPXcellerator: Provides on-demand learning in Data Science, AI, and Blockchain, with 39% enrollment growth in 2023 and free courses in skills like Python.
4. Metrobank’s EmpowHER campaign: Promotes women empowerment through initiatives like Breakthrough of Women Leaders, MB Connect, and The Purple Table Podcast for knowledge-sharing.

Foster transparent and collaborative partnerships for growth

1. The establishment of API developer portals is pivotal for driving innovation within the banking ecosystem. There is a shift towards a more collaborative and inclusive financial ecosystem, where value is co-created with network partners.
2. Marketplaces are emerging as pivotal hubs where banks, fintechs, and service providers converge to offer a comprehensive suite of financial products. This drives innovation by leveraging the collective expertise within the ecosystem.

• Leading banks in focus

1. ICICI and Axis Bank: Developed comprehensive API platforms, with ICICI offering over 600 APIs for SME and core banking, and Axis launching over 410 APIs to enhance fintech collaboration and customer experiences.
2. Maybank’s M-CONNECT and Union Bank’s API Marketplace: enable seamless integration of banking services into digital applications, offering customers real-time solutions like loan approvals and customized services.

Promote sustainable practices benefiting society and the environment

1. Banks are integrating energy-efficient technologies and renewable energy to reduce their electricity consumption (197 thousand MWh) and greenhouse gas emissions (657 kt), aligning with global sustainability goals.
2. They are also significantly contributing to community welfare by investing in small and medium enterprises (SMEs), forming local partnerships, and driving sustainable development, thereby enhancing their reputation and building trust within communities.

• Leading banks in focus

1. BOQ’s charity-linked debit cards: ME customers contribute one cent per digital payment to charities, with cards made from 82% recycled materials and featuring braille for inclusivity.
2. Krungthai’s sustainability initiative: The bank recycles PET bottles into employee shirts, reducing resource use, energy consumption, and emissions, aligning with its “Growing Together for Sustainability” vision.
3. KB SOHO consulting centres: KB Kookmin Bank offers free consulting to microbusiness owners and entrepreneurs through 13 centers, delivering over 37,000 services to date.
4. Woori love fund: Woori Bank’s employees voluntarily donate a portion of their paychecks, raising KRW 335 million in 2023 to support social projects for underprivileged groups.

Conclusion

The “APAC Banking Titans 2024” report showcases how leading banks in APAC are harnessing purpose-driven innovation and strategic digital transformation to reshape the future of banking. By leveraging advanced technologies and customer-centric strategies, these banks are not only maximizing performance and profitability but also setting new standards in digital excellence to meet evolving customer demands.

Explore these insights and discover the key drivers behind their success by downloading the full report.