Asian banks to ride on the 6% economic growth in the next five years

Growth of Asian economies will surpass the global growth average of 3.7%.

All is well for Asian banks in terms of future prospects, Monetary Authority of Singapore managing director Ravi Menon said during a banking symposium.

According to Menon, the region is expected to continue registering relatively high growth rates in the medium term – about 6% on average over the next 5 years, compared to the global average of 3.7%.

"Higher Asian incomes will drive demand for financial services, leading to more opportunities in banking," Menon said. He also noted that the global banks will continue to play an important role in the region, specifically in the wholesale banking segment and the intermediation of US Dollar flows.

"But the onus largely falls on Asian banks to expand financial inclusion, especially at the retail and small business level. Using innovative FinTech solutions, they can mobilise untapped savings and provide access to credit for under-banked individuals and businesses," he said.

He pointed out a 2015 World Bank study which found out that there are 2 billion adults on the planet with no bank accounts, more than half were in East and South Asia.

"A more recent study by the ADB covering Cambodia, Indonesia, Myanmar and the Philippines found significant gaps between demand and supply in several financial services, including payments, savings, and credit," he mentioned.

He added, "The road to financial inclusion is neither short nor easy. But it is an important one. Broadening access to financial services will offer Asian banks – and FinTechs – the opportunity to grow their business while serving a social purpose. Financial inclusion will be a key priority in the economic co-operation agenda when Singapore assumes the chairmanship of ASEAN next year."