Digital Financial Inclusion in ASEAN 2022

Key takeaways from the ASEAN Digital Generation Report 2022

In our latest flagship report with the World Economic Forum (WEF), we surveyed over 90,000 ASEAN citizens on the topic of Digital Financial Inclusion in ASEAN.

To access the full 2022 report, click here.

To watch the launch event of the 2022 report, which includes an interactive discussion with esteemed panellists, click here or here.

To read the previous 2021 report, click here.

Here are 8 key takeaways from our research:

1. 87% of respondents want to digitalise financial services further

Digital finance apps, such as mobile banking and e-wallet apps, are the most utilised apps after social media. Even so, 87% of the respondents desired to digitalise financial services further across broad arrays of activities. This is true even for respondents who are relatively “well-banked”.

2. Digitalisation has improved access to finance for the underserved

More than 50% of rural dwellers who use financial services are accessing them digitally; 65% of women have adopted digital finance apps (compared to 59% of men); MSMEs are obtaining loans from FinTechs, more so than larger businesses. These underserved groups have clearly benefited from the digitalisation of finance.

3. But gaps remain for many groups, including women, rural dwellers, and MSMEs

79% of respondents do not have access to credit, insurance, and investment products. These financially excluded individuals tend to be women, rural dwellers, and MSMEs. We found the top 3 barriers to accessing financial services to be concerns over security; lack of product understanding; and costs.

4. Two key constraints that MSMEs face include ability to access credits and complete international payments

57% of MSMEs who need credit either could not get loans or had to borrow from outside the banking sector. 42% of MSMEs faced international payment issues, restricting them from buying or selling their products abroad. This means that more can be done to help MSMEs access financial services.

5. Top barriers include concerns over security, complicated products/processes, and costs

These are the three key barriers preventing further access to financial services. Notice that the first two barriers can be mitigated through better digital and financial literacy.

6. Raising financial literacy could help increase access to financial services

For instance, those who learned finance are 96% more likely to have access to investment services than those who did not. In this regard, financial literacy is key in promoting financial inclusion.

7. Financial education requires a multi-channel approach, but hands-on exposure is usually important

When asked what they think are the best ways to learn about financial management, there was a clear consensus that “Learning by doing” is the preferred way to learn financial management. Younger respondents, in particular, preferred “Learning through Videos and Social Media” whereas older respondents preferred “Learning from Financial Advisors” and “Learning through Training Courses outside school”. Respondents living in rural areas were also more likely to prefer “Learning from Family and Friends” and “Learning through Formal Classes in School” as compared to urban-living respondents. Clearly, we need to take a multi-channel approach for different groups.

8. Upskilling digital and financial literacy goes hand in hand, alongside further digitalisation of finance

We need training for both financial and digital literacy to improve digital financial inclusion. At the same time, further digitalisation of finance and enhancement of safety and security will help create greater financial inclusion in the digital era.