New ANZ white paper identifies three banking models to capture ASEAN opportunities

Published 

ANZ today issued a white paper that identified three distinct types of banks operating in the Association of Southeast Asian Nations (ASEAN) which have used a regional presence, diverse customer base and long-term strategy to establish a successful presence in the region.

The report titled, ‘Shaping the Future of ASEAN Banking,’ examines the three different banking models which have emerged as better suited than large global banks to benefit from ASEAN’s growth opportunities.

The three models identified in the report include:

  • Regional banks – indigenous to ASEAN or the broader Asia Pacific region, they have largely taken over from European and US-based rivals that exited the region during the Global Financial Crisis (GFC).
  • Network banks – recognise the advantages of end-to-end banking services for customers, but are more selective or have less financial capacity to deploy resources in an onshore banking operation.
  • Partnership banks – collaborate with other banks to support their customers’ offshore strategies, typically choosing partners that align with the international footprints and strategies of their customers, but do not impinge on their home markets.

“ASEAN is forecast to emerge as the fifth largest economy in the world and this growth, combined with the promise of ASEAN’s financial integration and internationalisation, presents a compelling long-term opportunity for financial institutions,” said the paper’s author Carli Renzi, Insights Director Financial Institutions Group, ANZ.

“Winners in ASEAN banking will have a clear understanding of which of the three banking models best leverage their competitive strengths onshore in ASEAN or extend their capabilities, insights and reach via collaboration.

“The complexities of ASEAN’s economic structure and varying development stages remain an interesting challenge, however regional regulators seem to favour banks with a committed, long-term strategy and a strong balance sheet.

“For banks, ASEAN coverage is now imperative to helping customers enter into one of the world’s most dynamic markets.”