The Knowledge to Decide

Vietnam’s rural population is still struggling with access to basic financial services. With the high mobile penetration rate, can mobile phones be a platform to address their needs? Yap Far Loon, Business Development Director, Telecommunications at Spire Research and Consulting, shared his insights on the untapped potential for mobile financial services to serve Vietnam’s rural population in The Saigon Times Daily. According to a Spire report, an astounding 60 million people in Vietnam do not have access to basic financial services. Only 22% of the population – predominantly those residing in urban areas – have access to financial services. Why are the rural areas being left out? Yap opined that high costs are the main reason. For instance, the cost of installation, maintenance, operation and location rental for Automated Teller Machines (ATMs) alone exceeds VND300 million annually. Moreover, as rural transaction volumes are low, economies of scale are limited, making it even

Do Asia-Pacific financial services institutions need to spend more on IT operations to avoid losing market share to non-conventional players? Jeffrey Bahar, Deputy Chief Executive Officer of Spire Research and Consulting, discussed this view in FST Media. According to a McKinsey report, organizations that provided financial services in emerging markets – especially in the Asia-Pacific region – needed to spend more on IT operations. The study showed a dip in emerging market IT spending out of total operational costs from 9.4% in 2010 to 8.1% in 2012. On the contrary, IT spending in European banks averaged as high as 19% in 2012. Bahar commented that IT spending in mature markets cannot be compared to emerging markets. This is because stringent regulations had stoked higher IT spending in mature markets as compared to emerging ones. The report also suggested that spending on IT infrastructure improved overall efficiency; which was why banks in mature markets functioned effect

The future of financial services is all about digitalization. This much is well known. What is less well known is that this is also the reason why banking transactions might be driven by non-bank disruptors in the coming years. How well will future innovations such as e-currencies be integrated into the banking industry? Will cash become obsolete? Jeffrey Bahar, Deputy Chief Executive Officer of Spire Research and Consulting, reflects on the drastic changes happening in financial transactions today. The combination of digital cash and virtual currencies has inevitably curbed the usage of cash in developed markets and across many Asia-Pacific countries. Cash as we know it might lose its status as the dominant form of payment by volume in the coming years – unless banks create innovative new modes of payments to counter the trend. Bahar opined that mobile penetration would continue to rise in the developing Asia-Pacific markets. Unbanked and under-banked market segments would inc

As non-bank financial service activity expands in Asia, does the region need a more unified set of banking regulations? Leon Perera, Chief Executive Officer of Spire Research and Consulting, remarked that Asian banks and governments should be at the forefront of pushing for better global regulations on non-bank financial activities, rather than forming alternative regional standards. At stake is the delivery of financial services for Asia’s huge unbanked and under-banked population. Perera commented that unified banking regulations across the Asia-Pacific region should come via global multi-lateral platforms. Asian governments should work with each other to form an effective regional voice for improvements in global financial regulatory regimes. The implementation of the Basel I, Basel II and Base III standards after the global financial crisis had not been easy in Asia, due to various inconsistencies. Moreover, the Basel reforms were reportedly too Europe and US market centr