The Star: Wholesale Banking Outlook Bright In South East Asia

Oliver Wyman partners Seo Young Lee and Anirudh Singh spoke to The Star on the prospects of wholesale banking in South East Asia and Malaysia. Their comments come on the back of our annual report on the wholesale banking industry with Morgan Stanley, Climate, Crypto, And Competing In This Cycle.

On the wholesale banking momentum in the South East Asia region over the next few years, rate normalisation and forex volatilities would provide a structural boost to the wholesale banking business.

Malaysia’s wholesale banking growth is slightly lower than its overall South-East Asian counterparts, with the latter being driven by faster economic and wholesale banking revenue growth in markets like Indonesia and Vietnam. The growth in these markets is still heavily driven by financing activities, whereas markets like Singapore and Malaysia have transitioned towards a more diversified mix of revenues including transaction banking, markets and investment banking.

In Malaysia, climate efforts have started to take priority among the leading banks over the past year and further boosted by the recent Bank Negara guidelines on climate risk. Anirudh expects this scenario to become even more broad-based in the coming years.

There are two disruptive trends over the longer-term horizon: climate transition and digital assets. The climate transition will disrupt many of the industries that wholesale banks serve, but the wholesale banking industry has the expertise and client franchise required to support the transition of these industries to net-zero while building new green revenue streams in decarbonisation finance, carbon trading, etc.

The digital assets revolution may launch a new asset class and disrupt legacy businesses, but the industry has the expertise and the model to transform cryptocurrencies into an investable asset class for corporate and institutional clients. We believe the fundamental driver of adoption of digital assets by corporate and institutional clients will be the introduction of more clarity in regulation, which will be of advantage to banks that already operate in highly regulated markets.

Read the full article here.