The ASEAN region's leading banking player is already in the midst of retrofitting their banking system to take advantage of cloud and mobile analytics while at the same time initiating a slew of fintech innovation lab or hubs. The formula looks strikingly similar across the region with minor differences from one bank to the other in terms of digital banking approach and local needs. This short article gives a glimpse of the addressable mobile-FSI market by considering some data points from Indonesia and Thailand. I've included in the chart a line break (i.e. smartphone users) to indicate the feasible approach to mobile banking by way of either enhanced core offering or digital banking offering or via an underbanked/unbanked offering approach. The approach will be further discussed in a separate article.
(As shown in the charts below) The larger middle-class population in Thailand (in percentage terms) is also supported by larger penetration of smartphones and active internet subscription. In Indonesia, the market is largely rural with lower percentage of smartphone and internet penetration versus that of Thai. Indonesia has a huge installed base of feature phone that provides pre-installed social media apps such as Facebook. This makes for an immediate split in current addressable mobile banking segment - those using feature phones versus smart phones. Although it is estimated that Indonesia's active smartphone users will surpass 100 million mark by 2018. The size of the addressable mobile-FSI market will further be accelerated if Indonesia branch-less banking initiative actually improves financial inclusion through the using of mobile phones.
It is worth noting that a large portion of poor in Thailand is urban poor versus Indonesia's predominantly remote rural poor. Thai's poor is largely an accessibility issue rather than infrastructure availability issues. The lack of credit information and know-how might have shut some of the poor off from financial inclusion entirely.