Financial Digitalization and Its Implications for ASEAN+3 Regional Financial Stability
The use of digital banking has grown significantly across the globe, mainly due to high rates of internet penetration, widely adopted mobile devices, and increasing customer demand for digital financial services. In select economies in Asia and the Pacific, the digital-banking penetration rate approached 90 percent in 2021.1 Across the region, digital wallets have taken hold as the dominant e-commerce payment instrument, accounting for 68 percent of regional e-commerce transactions value in 2021, which is projected to expand to over 72 percent by 2025 with the declining use of cash.
This report looks at the impact of digitalization on the financial stability of the Association of Southeast Asian Nations (ASEAN) plus the People’s Republic of China (PRC), Japan, and the Republic of Korea—a grouping collectively known as ASEAN+3. Dramatic changes have been observed in the region and this report reexamines the impact of these changes on financial regulations. In addition, the report proposes necessary risk mitigation measures along with the transformation of the regional financial landscape.