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Over the past decade there has been a shift in strength between Western and Eastern banking. While Asia used to look at the West as an example of banking in terms of product and service innovation, the numbers recently shared in a research publication by McKinsey’s Future of Asia paints a different picture of the current situation.

The report highlights how more than 40 of the top 100 largest banks in the world by assets are now Asian. Also, approximately half of the market capitalization is taken by Asian Financial Institutions. The Asian banking sector has been the largest regional market for a decade, generating profits in excess of USD 700 billion (pre-taxes), equivalent to 37% of the global banking profit in 2018.

Asian banks have accelerated in providing advanced tech solutions for their clients, showing a dynamic fintech trend. From China to Southeast Asia, a multitude of fintech providers have established their presence as the de facto standard payment solution in their respective markets. From China, and spreading quickly throughout other Asian countries, Alipay has become a heavily adopted payments model for both the B2B and B2C segments.

In terms of Trade Finance offerings and market share, Western banks, such as BNP Paribas, Société Générale and ABN Amro, up until recently market leaders are now retreating and down-sizing, especially in Commodity finance where recent frauds have made banks shut down desks in Asia as well as globally. The need for funding and financing in the industry is expected to remain or grow, and it seems plausible that the gap left behind by European banks will be picked up by Asian banks - further shifting the centre of power Eastward in the world of banking.

More figures and upcoming trends can be found in the results posted in the report by McKinsey’s Future of Asia.


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