THE 42nd General Assembly of the Asean Inter-Parliamentary Assembly was held in August, emphasising the paramount importance of expediting digitalisation, and to bridge the digital divide.
Having highly transformative technologies would improve Southeast Asia’s economic competitiveness and society’s well-being, while ensuring inclusion and sustainability. Undeniably, the coronavirus pandemic has expedited digital transformation in Southeast Asia.
As the Covid-19 pandemic rampages on, leading to certain levels of movement restrictions across Asean countries, digital technology will be significant in driving economic recovery in Southeast Asia.
During the pandemic, businesses adapted by pivoting towards e-commerce, firms embraced communication and teleconferencing tools, while schools offered online lessons via digital applications. Digitalisation in Southeast Asia has further advanced e-commerce, data infrastructure and digital banking. Asean governments have also been proactive in nurturing digital talents.
E-commerce sales in Southeast Asia reached US$62 billion (RM260 billion) in 2020, and is predicted to increase by US$100 billion within the next four years.
Vietnam’s digital economy is expected to reach US$52 billion by 2025. It is a highly lucrative emerging market, where e-commerce giants such as Alibaba and Amazon are venturing into. E-commerce platform Tiki is Vietnam’s biggest homegrown digital shopping platform. Tiki initially launched as a digital bookstore and has evolved into offering a wide range of consumer goods such as lifestyle and electronics products. Recently, it also started providing insurance solutions by partnering with AIA.
Vietnam is emerging as one of the best emerging data centre markets in the world. Currently, Vietnam’s data centre market is worth approximately US$858 million. The increase in demand for data centres in Vietnam is primarily attributable to the need for faster processing speeds and data storage solutions.
The Singapore Trade Data Exchange (SGTraDex) was inaugurated as a digital infrastructure platform for trade data sharing. With SGTraDex, supply chains can be connected locally and internationally, while ensuring financing integrity and improving operational effectiveness.
In April, Chinese tech conglomerate Tencent Holdings opened its first internet data centre in Indonesia. This is a strategic move to tap one of the fastest growing regions in the world. It is also an opportune moment to build a presence in Indonesia, with its huge and fast-growing internet population, and cloud computing market burgeoning expeditiously.
As part of achieving digital transformation, the Indonesian government hopes to nurture nine million expert digital talents by 2030. For a start, the Communications and Information Ministry is awarding Digital Talent Scholarships to citizens talented in the information technology field.
There is support from the private sector where Tokopedia inaugurated the AI Centre of Excellence and the Tokopedia Academy to spur innovation and create a pool of technology talents in Indonesia.
The SayaDigital initiative in Malaysia focuses on raising digital literacy among youths and senior citizens. This inclusive digital programme is aligned with the Malaysian Digital Economy Blueprint and the Shared Prosperity Vision 2030. During the programme, there will be digital skills training, including the learning of digital topics such as e-wallet and e-banking.
Southeast Asian nations hope to empower their citizens with the right digital skills and infrastructure, and become a major player in the digital economy market.
According to Boston Consulting Group, Southeast Asia is one of the most attractive places for digital banking. There is immense potential with Asean nations having a combined digital population of more than 400 million people.
There are digital banking applications in Thailand, with the likes of Krungthai Bank’s Pao Tang, Kasikornbank’s K-Plus and Siam Commercial Bank’s SCB Easy. Pao Tang is currently Thailand’s largest digital banking application, with more than 40 million users, providing financial, investing and internet banking services. During the pandemic, Krungthai Bank expedited the transformation to digital banking. As a result, the Thai bank had a more than 70% increase in mobile banking transactions.
Cambodia’s Prince Bank launched the Prince Mobile application two years ago. The digital banking application will allow users to transfer funds, pay their bills and manage their finances online, without having to visit the bank’s branch physically. Furthermore, Prince Mobile, which utilises data analytics, will provide customers with financial insights and advice. The bank has a customer-centric business model, and constantly seeks to provide better customer experience, with better digital product features and innovation.
The pandemic has expedited the Fourth Industrial Revolution, where digital technologies such as artificial intelligence, automation and the Internet of Things will alter how we live and work. Leveraging on these digital technologies will be crucial for Southeast Asia’s economic recovery.
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