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Article

Staying competitive in Asia’s digital banking landscape

5

min read

Published:
February 2, 2023

Asia’s emerging digital banking landscape presents significant opportunities and challenges for new contenders in the market. Digital banks trust Proto AI Customer Experience solutions to scale omnichannel customer service in local languages in Asia.

In the past decade, Southeast Asia's digital banking market has grown significantly due to an uptick in smartphone users. With an increasing number of Asian countries issuing digital banking licenses, the market is poised for even more growth – particularly in countries like Indonesia, where over 50% of the population is unbanked yet has the second highest number of e-payments in the region.

However, strict regulatory landscapes also pose a challenge for new players looking to compete in these digital banking spaces. Consortia models have become a natural consequence of tight regulations, making it difficult for startups and smaller players to succeed. To stay competitive, digital banks in Asia turn to solutions like Proto to offer innovative, multilingual customer service at scale.

Here are a few important ways Proto can help digital banks in Asia compete:

Scalability in local languages

With over 60% of people in Southeast Asia underbanked, scalability is a key competitive edge for digital banks. But a significant customer segment is left out by digital banks that only offer services in common languages. Many digital banks turn to chatbots to automate simple queries, but there are very few chatbots that can offer conversational service in local languages like Thai and Hmong.

Proto’s natural language processing engine allows banks to automate service in these languages with proprietary data acquired from partnerships with central banks. Banks serving countries with diverse populations can offer services in a conversational, user-friendly format that helps them reach a wider customer base than their competitors.

Balancing cost-effectiveness with excellent service

Most financial institutions are paying increasing attention to maintaining healthy margins as a growth engine. While digital banks already have the upper hand when it comes to cost-effectiveness, maintaining excellent customer service over digital channels can be a challenge.

A common solution is to automate customer service with chatbots, but implementing these solutions can be complex for banks that want to provide personalsed, conversational support. Proto’s natural language processing engine is capable of identifying customer intents and storing customer information, enabling them to provide truly conversational, customised support at scale.

Managing risk while staying agile

Although consumers in Asia may be accustomed to using apps for other digital services, a lack of brick-and-mortar branches for banking poses additional risks to customers. Last year, DBS Group in Singapore was fined when customers lost access to their bank accounts for three days, highlighting the importance of reliable digital tools. In addition to technological and cybersecurity risks, digital banks can also face legal and privacy risks.

Proto’s bring your own database feature allows banks to use private databases to store personal information, while the Proto platform operates in the cloud – allowing banks to effectively manage risk without the expense of on-site servers.

Regulatory compliance as a feature

For new players entering the space, achieving what Deloitte calls a “compliance-by-design” business model is crucial for license applications. While many technologies can help banks scale, they aren’t often built with regulatory compliance for banks in mind.

Proto helps challenger banks achieve this model with chatbots deployed across central banks, such as the Central Bank of the Philippines, where 43% of complaints were received by Proto’s AI Customer Experience solution in 2021. It was also featured in Cambridge SupTech Lab’s SupTech Marketplace, a resource that brings together an ecosystem of supervisory technology solutions for financial service providers.

Overcoming the challenges of thriving in Asia’s digital banking ecosystem means working closely with tech companies that have a deep understanding of regulatory compliance, local languages, and risk management. 

Proto’s AI Customer Experience solution is powered by a proprietary natural language processing engine that understands the nuances of local languages, thanks to regulatory partnerships and close work with local engineers. Proto also brings a sharp focus on embedding compliance into chat, and delivering these chats in a way that protects consumer welfare and trust.

To learn more about how Proto can help your digital bank, reach out to our experts today.

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