Thailand’s digital transformation has shifted from an ambitious policy agenda to a national necessity. As the country accelerates its Thailand 4.0 strategy, digital platforms are becoming central to boosting competitiveness, enhancing public services, and building economic resilience. From logistics and healthcare to finance and manufacturing, digital tools now underpin how Thailand moves, heals, pays, and grows.
Recent reforms, including the National AI Strategy, Smart City Masterplan, and National Digital ID framework, have been paired with efforts to strengthen digital infrastructure nationwide. Yet challenges remain: integrating platforms across government, closing the generational digital divide, and safeguarding vulnerable users in a rapidly evolving fintech and gig economy.
Through multiple roundtables and stakeholder dialogues, Ecosystm has uncovered five core themes that highlight both the momentum and the friction points in Thailand’s digital journey.
Theme 1: Bridging the Regional Divide
Thailand’s digital transformation is accelerating in urban centres like Bangkok, Chonburi, and Rayong, but rural and low-income regions, especially in the North and Deep South, continue to lag. Gaps in connectivity, digital skills, and modern technical education are limiting access to online learning, mobile banking, and digital public services, while also holding back the growth of tech-driven industries.
Initiatives like Net Pracharat have brought broadband to over 75,000 villages, and new investments in regional data centres and telecom infrastructure show promise. Still, last-mile gaps and fragile networks persist, particularly in conflict-affected or underserved areas. Even where fibre is available, unstable connections often block meaningful digital adoption.
At the same time, Thailand’s push into future-focused industries such as EVs, semiconductors, AI, and smart logistics, is straining its talent pipeline. The Eastern Economic Corridor (EEC) is attracting major investment, but the demand for skilled workers in data science, cybersecurity, and industrial AI far exceeds supply. Many regional technical education systems have not kept pace, widening the skills gap.
To ensure inclusive growth, Thailand needs to pair infrastructure investment with targeted reskilling and education reform. Programs like the Digital Skill Development Academy and revamped TVET initiatives are important first steps; but broader progress will require stronger industry-academia partnerships, faster certification pathways, and universal access to digital learning.
Theme 2: Unifying Government Services for a Seamless Citizen Journey
From PromptPay-linked welfare payments and Mor Prom for health services, to the rollout of the NDID (National Digital ID), Thailand has made considerable progress in digitalising public services. Citizens can now access more services online than ever before.
However, many of these systems still operate in silos, with duplicated citizen data, separate logins, and limited backend integration between agencies. Ministries and local governments often lack the interoperability standards and cloud infrastructure needed to provide seamless, real-time services.
The next phase of government digitalisation must focus on platform-level integration, supported by secure data sharing frameworks, API-first design, and privacy-by-default policies. The goal is to move from digitising transactions to building a citizen-centric, connected state, where services are proactive, mobile-friendly, and unified across domains.
Theme 3: Strengthening Public Trust Through Proactive Cybersecurity
With the rise of digital government, cloud adoption, and cashless ecosystems, Thailand’s attack surface is rapidly expanding. High-profile breaches in healthcare, telecom, and finance have triggered growing public concern around data misuse, fraud, and infrastructure vulnerabilities.
The government has enacted the Cybersecurity Act (2019) and PDPA (2022), and agencies like the National Cybersecurity Agency (NCSA) are stepping up threat monitoring. But cybersecurity maturity across sectors remains uneven. Many SMEs, regional hospitals, and even provincial government systems operate with limited threat intelligence and minimal incident response protocols.
Cybersecurity must now move from compliance to strategic resilience. This includes building sector-specific response plans, launching cyber drills in critical infrastructure, and scaling cyber talent development across the country. Trust in digital services will depend not just on what’s offered, but on how securely it’s delivered.
Theme 4: Scaling Trust Through Local Language, Visibility, and Human Oversight
AI systems in Thailand are increasingly interfacing with the public, from chatbots and digital assistants to automated approvals and diagnostics. However, public trust in these systems remains fragile, particularly when users cannot understand how decisions are made or get help when things go wrong.. Language barriers and unclear design only add to the uncertainty.
Many AI tools are built in English-first environments, with limited Thai-language optimisation or cultural context. In rural areas or among older populations, this can create friction and resistance, even when the underlying system works well. Without transparency, user control, or recourse, AI tools risk being seen as alienating rather than empowering.
To build public confidence, AI deployments must prioritise explainability, Thai-language usability, and built-in pathways for human support. This includes interface localisation, clear model intent statements, and fallback mechanisms. Trust will not be built through performance alone, it must be earned through transparency, accessibility, and responsiveness.
Theme 5: Embedding Governance to Sustain Smart Urban Growth
Thailand has made significant headway in its smart city development agenda, with over 30 provinces participating in the national Smart City program. Flagship initiatives in Phuket, Chiang Mai, Khon Kaen, and parts of the EEC have introduced smart traffic systems, e-governance tools, environmental monitoring, and digital tourism platforms.
However, many smart city projects are still pilots, driven by local champions, reliant on short-term grants, and lacking long-term governance structures. Fragmented data, unclear stakeholder roles, and limited collaboration between cities continue to slow scale and national replication.
The Smart City Office under DEPA is working to address these challenges by developing standard frameworks, urban data platforms, and public-private investment models. To maintain momentum, Thailand will need to embed smart city governance in multi-year digital urban strategies, establish shared infrastructure foundations, and invest in capacity-building for local leaders.
For smart cities to succeed, they must move beyond tech demonstrations and deliver real, lasting improvements in liveability, safety, and economic opportunity.
Sustaining Momentum in a Connected Nation
Thailand’s digital future won’t be defined by policy or technology alone; but by how effectively the country aligns infrastructure, skills, services, and trust at scale. The foundations are already being built in classrooms, city halls, data centres, and boardrooms. The real opportunity lies in weaving these efforts into a cohesive, resilient digital fabric. Lasting impact will come not just from momentum, but from turning vision into everyday value for people, communities, and businesses alike.
Consider the sheer volume of information flowing through today’s financial systems: every QR payment, e-KYC onboarding, credit card swipe, and cross-border transfer captures a data point. With digital banking and Open Banking, financial institutions are sitting on a goldmine of insights. But this isn’t just about data collection; it’s about converting that data into strategic advantage in a fast-moving, customer-driven landscape.
With digital banks gaining traction and regulators around the world pushing bold reforms, the industry is entering a new phase of financial innovation powered by data and accelerated by AI.
Ecosystm gathered insights and identified key challenges from senior banking leaders during a series of roundtables we moderated across Asia Pacific. The conversations revealed a clear picture of where momentum is building – and where obstacles continue to slow progress. From these discussions, several key themes emerged that highlight both opportunities and ongoing barriers in the Banking sector.
1. AI is Leading to End-to-End Transformation
Banks are moving beyond generic digital offerings to deliver hyper-personalised, data-driven experiences that build loyalty and drive engagement. AI is driving this shift by helping institutions anticipate customer needs through real-time analysis of behavioural, transactional, and demographic data. From pre-approved credit offers and contextual investment nudges to app interfaces that adapt to individual financial habits, personalisation is becoming a core strategy, not just a feature. This is a huge departure from reactive service models, positioning data as a long-term strategic asset.
But the impact of AI isn’t limited to customer-facing experiences. It’s also driving innovation deep within the banking stack, from fraud detection and SME loan processing to intelligent chatbots that scale customer support. On the infrastructure side, banks are investing in agile, AI-ready platforms to support automation, model training, and advanced analytics at scale. These shifts are redefining how banks operate, make decisions, and deliver value. Institutions that integrate AI across both front-end journeys and back-end processes are setting a new benchmark for agility, efficiency, and competitiveness in a fast-changing financial landscape.
2. Regulatory Shifts are Redrawing the Competitive Landscape
Regulators are moving quickly in Asia Pacific by introducing frameworks for Open Banking, real-time payments, and even AI-specific standards like Singapore’s AI Verify. But the challenge for banks isn’t just keeping up with evolving external mandates. Internally, many are navigating a complicated mix of overlapping policies, built up over years of compliance with local, regional, and global rules. This often slows down innovation and makes it harder to implement AI and automation consistently across the organisation.
As banks double down on AI, it is clear that governance can’t be an afterthought. Many are still dealing with fragmented ownership of AI systems, inconsistent oversight, and unclear rules around things like model fairness and explainability. The more progressive ones are starting to fix this by setting up centralised governance frameworks, investing in risk-based controls, and putting processes in place to monitor things like bias and model drift from day one. They are not just trying to stay compliant; they are preparing for what’s coming next. In this landscape, the ability to manage regulatory complexity with speed and clarity, both internally and externally, is quickly becoming a competitive edge.
3. Success Depends on Strategy, Not Just Tech
While enthusiasm for AI is high, sustainable success hinges on a clear, aligned strategy that connects technology to business outcomes. Many banks struggle with fragmented initiatives because they lack a unified roadmap that prioritises high-impact use cases. Without clear goals, AI projects often fail to deliver meaningful value, becoming isolated pilots with limited scalability.
To avoid this, banks need to develop robust return-on-investment (ROI) models tailored to their context — measuring benefits like faster credit decisioning, reduced fraud losses, or increased cross-selling effectiveness. These models must consider not only the upfront costs of infrastructure and talent, but also ongoing expenses such as model retraining, governance, and integration with existing systems.
Ethical AI governance is another essential pillar. With growing regulatory scrutiny and public concern about opaque “black box” models, banks must embed transparency, fairness, and accountability into their AI frameworks from the outset. This goes beyond compliance; strong governance builds trust and is key to responsible, long-term use of AI in sensitive, high-stakes financial environments.
4. Legacy Challenges Still Hold Banks Back
Despite strong momentum, many banks face foundational barriers that hinder effective AI deployment. Chief among these is data fragmentation. Core customer, transaction, compliance, and risk data are often scattered across legacy systems and third-party platforms, making it difficult to access the integrated, high-quality data that AI models require.
This limits the development of comprehensive solutions and makes AI implementations slower, costlier, and less effective. Instead of waiting for full system replacements, banks need to invest in integration layers and modern data platforms that unify data sources and make them AI-ready. These platforms can connect siloed systems – such as CRM, payments, and core banking – to deliver a consolidated view, which is crucial for accurate credit scoring, personalised offers, and effective risk management.
Banks must also address talent gaps. The shortage of in-house AI expertise means many institutions rely on external consultants, which increases costs and reduces knowledge transfer. Without building internal capabilities and adjusting existing processes to accommodate AI, even sophisticated models may end up underused or misapplied.
5. Collaboration and Capability Building are Key Enablers
AI transformation isn’t just a technology project – it’s an organisation-wide shift that requires new capabilities, ways of working, and strategic partnerships. Success depends on more than just hiring data scientists. Relationship managers, credit officers, compliance teams, and frontline staff all need to be trained to understand and act on AI-driven insights. Processes such as loan approvals, fraud escalations, and customer engagement must be redesigned to integrate AI outputs seamlessly.
To drive continuous innovation, banks should establish internal Centres of Excellence for AI. These hubs can lead experimentation with high-value use cases like predictive credit scoring or real-time fraud detection, while ensuring that learnings are shared across business units. They also help avoid duplication and promote strategic alignment.
Partnerships with fintechs, technology providers, and academic institutions play a vital role as well. These collaborations offer access to cutting-edge tools, niche expertise, and locally relevant AI models that reflect the regulatory, cultural, and linguistic contexts banks operate in. In a fast-moving and increasingly competitive space, this combination of internal capability building and external collaboration gives banks the agility and foresight to lead.
GreenTech is reshaping finance by fusing technology with sustainability. From startups to large financial institutions, there’s a clear push to embed climate intelligence into financial decisions. In 2024, green fintech investments hit USD 2.7B – underscoring strong momentum and growing confidence in tech-led sustainability solutions.
The focus is sharp: drive financial innovation while delivering real environmental impact.
Here’s a look at key Green Finance trends that are reshaping the industry.
Click here to download “The Future of Finance is Digital – and Sustainable” as a PDF.
Catalysing Change: Impact Investing
Impact investing is going mainstream, especially in fast-growing emerging markets.
This shift reflects a growing realisation: private capital is critical to climate action, and tackling climate risks is a financial opportunity, not just an ethical choice.
AVPN (Asian Venture Philanthropy Network) has launched ImpactCollab – a platform linking finance professionals with verified impact organisations, due diligence tools, and monitoring resources. Initially used by private banks in Singapore to bolster philanthropy advisory, it will soon expand into blended finance and impact investing, backed by MAS.
Green bonds are also gaining momentum, driven by investor demand, regulatory tailwinds, and rising climate risk awareness. In Singapore, NUS, UOB, and Northern Trust piloted tokenised green bond reporting to boost transparency. India, meanwhile, opened its sovereign green bonds to foreign investors via the Fully Accessible Route (FAR), unlocking global capital for climate goals.
Empowering Customers with Carbon Insights
Carbon tracking is becoming a staple in digital banking, driven by a growing demand for transparency around environmental impact. Banks are responding by embedding carbon calculators into apps – enabling users to measure emissions, benchmark against national averages, and get actionable tips to reduce their footprint.
In Indonesia, Bank Mandiri has launched an in-app feature that helps customers track their personal carbon emissions, making it easy to understand the environmental impact of daily actions. The Royal Bank of Canada has partnered with a carbon management platform to offer businesses tools to monitor and manage their emissions.
These moves reflect a broader shift: banks are embedding sustainability into everyday financial behaviour and deepening customer engagement through purpose-driven services.
Blockchain-Enabled Carbon Trading
Blockchain is transforming carbon trading by enabling a decentralised, transparent, and secure way to verify and transact carbon credits.
This technology addresses long-standing issues of fraud and inefficiency, offering a more reliable and cost-effective approach to managing credits and meeting climate goals.
Thailand has eased crypto regulations to promote blockchain-based carbon trading, positioning itself as a leader in sustainable tech. Meanwhile, US-based financial services firm Northern Trust has launched a blockchain platform that allows project developers to generate, verify, and trade voluntary carbon credits in near real-time. Together, these moves signal a shift toward mainstream adoption of blockchain in carbon markets.
Addressing the Climate Risk Gap
As climate risks intensify, small and medium enterprises (SMEs) are seeking tools to assess and manage their exposure. Despite being highly vulnerable to climate events, SMEs often lack the resources to navigate complex risk landscapes.
Fintechs are stepping in with climate risk-scoring tools that help SMEs identify vulnerabilities and take proactive steps – such as securing insurance or adapting their strategies.
Marsh has highlighted the need for SME-focused climate assessments in New Zealand, particularly for high-risk sectors. Its Climate Risk Navigator helps businesses build resilience and make informed decisions on insurance and sustainability. In India, insurers like ICICI Lombard are using geospatial tech – GIS, satellite imagery, and AI – to power climate-linked products. For example, its satellite-based insurance for wheat farmers in Punjab enables faster, more accurate yield assessments and claim settlements.
Rise of Climate-Conscious Crypto
Once criticised for high energy use, crypto mining is undergoing a green makeover – fuelled by surplus renewable energy and optimised by AI.
What was seen as wasteful is now being reimagined as a tool for grid stability and sustainable growth.
In Switzerland’s Canton of Bern, Bitcoin mining is being explored as a way to absorb excess power and stabilise the grid. In the UK, mining firms are tapping into unused wind energy during off-peak hours to avoid waste. This shift is reaching emerging markets too – Pakistan is converting surplus electricity into value by launching state-backed Bitcoin mining and AI data centres, turning untapped power into economic opportunity.
Ecosystm Opinion
Becoming truly sustainable presents a unique challenge for financial organisations, as their responsibility extends beyond internal operational efficiencies to actively empowering customers and the wider ecosystem to embrace green practices. This is compounded by a growing reliance on increasingly compute-intensive and energy-inefficient technologies.
The recent and growing emphasis on Green Finance offers a promising outlook, suggesting a positive shift in the industry’s trajectory towards a more sustainable future.
This year’s theme at the ETHDenver – one of crypto’s OG annual gatherings, was “Year of the Regenerates.” This captures the core tension in Web3: the casino vs. the computer. On one side, the pump-and-dumps, meme coin frenzies, and hyper-financialisation. On the other, the cypherpunk ideals of decentralisation, open infrastructure, and a freer, fairer web.
It’s a timely moment for reflection. Crypto prices are tanking alongside global markets, Bitcoin is down, and headline scandals – like the USD1.3B hack of ByBit and millions lost by retail investors to the meme coin mania – paint a bleak picture.
But the full story isn’t just chaos and collapse. There’s real momentum beneath the noise – and a dose of optimism is exactly what the space needs right now.
ByBit: Green Shoots Amidst the Biggest Hack
The crypto market has seen renewed bearish sentiment, intensified by the USD1.5 billion ByBit hack on February 21, 2025 – the largest crypto heist to date, reportedly carried out by North Korea’s Lazarus Group. Notably, the attack’s impact was limited thanks to Copper’s Clearloop custody infrastructure, which protected user funds through its bankruptcy-remote design.
Yet despite the headline-grabbing loss, several market watchers have pointed to unexpectedly bullish signals emerging from the aftermath.
- Reduced Leverage and Market Stability. A potential silver lining is the decline in leverage across the market. With meme coin fatigue setting in, investors may be shifting toward more sustainable strategies. This could pave the way for long-term capital, especially as independent advisors begin recommending crypto and ETF products.
- Liquidity Injection from Loss Coverage. ByBit CEO Ben Zhou confirmed the company is covering 80% of the stolen funds through bridge loans. Some view this as bullish, arguing that while the stolen ETH remains on-chain, ByBit’s repurchases inject fresh liquidity into the market.
- No Bank Run and Trust in Exchanges. The lack of a bank run after the hack signals strong trust in ByBit’s solvency and response. Despite being one of the biggest heists in crypto, ByBit’s handling has been steady – prices have held, and users haven’t rushed to withdraw. That, in itself, is a positive sign. CEO Ben Zhou echoed this confidence, stating: “ByBit is solvent even if the loss isn’t recovered. All client assets are 1:1 backed.”
- Unexpected Positive Spin: Hacks as Catalysts. A contrarian view suggests that hacks, despite their damage, can drive platform evolution. This hack, for instance, could be seen as bullish – profit was extracted from value extractors, pushing ByBit to strengthen, become more anti-fragile, and reset stale positions and liquidity. The takeaway: crises can spark necessary resets and infrastructure upgrades – an unexpected upside in an otherwise negative event.
While some views may be unconventional, they underscore a maturing market better equipped to handle challenges, offering optimism for long-term recovery and growth beyond the current value and liquidity fluctuations.
Institutional Adoption Peaking Despite Bearish Sentiment
The tokenisation of real-world assets (RWAs) and the growing institutional adoption of digital assets are gaining momentum, even amid broader bearish sentiment in the crypto market. Driven by technological innovation, clearer regulations, and tangible benefits like enhanced liquidity, cost efficiency, and streamlined operations, these trends continue to evolve. Here’s an overview of the latest developments:
- Tokenisation of Real-World Assets. Despite bearish sentiment, the RWA tokenisation market is set for rapid growth. Analysts like Clearpool’s Ozean predict tokenised RWAs could hit a USD 50 billion market cap by 2025, driven by TradFi moving on-chain. Other forecasts from Standard Chartered (USD 30 trillion by 2034) and Boston Consulting Group (USD 16 trillion by 2030) highlight long-term potential, even if short-term conditions are volatile.
- Expansion of Asset Classes. Tokenisation is expanding beyond U.S. Treasuries and stablecoins to include real estate, private credit, commodities, carbon credits, and intellectual property. Real estate tokenisation, for example, is unlocking liquidity in traditionally illiquid markets, with platforms showing savings in home equity lines of credit (HELOCs) and collateralised loans. The total value locked in tokenised assets surpassed USD 176 billion in 2024, a 32% increase, with non-stablecoin assets growing 53%.
- Stablecoins as the “Killer App”. Stablecoins, pegged to assets like the U.S. dollar or treasuries, are becoming a safe haven in crypto. Their stability during market downturns has boosted their reputation as a “killer app” for blockchain, shifting focus from speculative tokens to practical, low-volatility tools. With a market cap surpassing USD 200 billion in 2025, Tether (USDT) and USD Coin (USDC) lead the way. New entrants like PayPal’s PYUSD (launched 2023) and treasury-backed stablecoins (e.g., Ondo Finance) are making waves. The “PayFi” race is on, with stablecoins integrating yield-bearing features linked to tokenised treasuries.
- Technological Advancements. Blockchain platforms are evolving, with AI driving RWA tokenisation and decentralised public infrastructure (DePIN). AI tools are enhancing risk assessment, compliance, and trading, making tokenised assets more attractive to institutions. Multi-chain technologies are improving interoperability and scalability, overcoming past limitations.
- Notable Projects and Milestones.
- BlackRock’s BUIDL Fund. Launched in March 2024, this tokenised fund became the largest of its kind, managing USD 657 million in assets by January 2025. BlackRock is also investing in tokenisation firms and exploring stablecoins, signalling a strategic shift.
- Clearpool’s Ozean. This protocol processed over USD 650 million in loans in Q4 2024, with a 51% rise in total value locked, reflecting growing traction.
- T-RIZE Group. In December 2023, the firm tokenised a USD 300 million residential project in Canada, showcasing real estate tokenisation at an institutional level.
- JPMorgan. Using its Onyx platform for blockchain-based settlements, tokenisation is now seen as a “killer app” for efficiency.
- Goldman Sachs. Its Digital Asset Platform is tokenising bonds, and repo transactions with Broadridge and J.P. Morgan total trillions monthly.
- Deutsche Bank. Joined Singapore’s Project Guardian in May 2024 to tokenise assets, reflecting institutional global interest.
- Regulatory Progress as a Catalyst. While regulatory uncertainty remains, 2025 shows promise. The potential appointment of crypto-friendly figures under a Trump administration could accelerate clarity in the U.S. Meanwhile, the Financial Action Task Force (FATF) is developing standards for tokenised RWAs, fostering cross-border adoption. Countries like Switzerland, Singapore, and Japan are already testing tokenised financial products, creating a more favourable regulatory environment.
- Institutional Sentiment and Investment Surveys. Institutional confidence is high. A BNY Mellon survey found 97% of institutional investors believe tokenisation will revolutionise asset management. EY-Parthenon research shows two-thirds of institutions are already invested in digital assets, with larger asset managers (AUM > USD 500 billion) launching tokenised funds. The Tokenised Asset Coalition found 86% of Fortune 500 executives recognise tokenisation’s benefits, with 35% actively pursuing projects.
- Bridging TradFi and DeFi. RWAs are bridging traditional and decentralised finance. Stablecoins tied to tokenised assets (e.g., treasuries) mitigate volatility, attracting cautious institutional players. Partnerships like Ripple and Archax aim to bring hundreds of millions in tokenised RWAs to the XRP Ledger, highlighting the convergence of TradFi and DeFi.
Resilience Amid Bearish Sentiments
Despite bearish market conditions driven by crypto volatility and macro pressures like inflation, institutional adoption is gaining momentum. Tokenisation offers tangible benefits – fractional ownership, 24/7 trading, and faster settlements – that solve inefficiencies in traditional systems. These advantages hold steady, regardless of market sentiment. For example, tokenised repos minimise operational errors and unlock intraday liquidity, while tokenised yields, such as treasuries, now outpace DeFi lending rates, drawing capital even in a “crypto winter.”
Regulatory fragmentation and security risks like hacking and smart contract vulnerabilities still pose challenges, while mainstream adoption, though accelerating, trails behind pilot successes.
Yet, the fundamentals remain resilient. With upcoming upgrades like Solana’s Firedancer client and Ethereum’s Pectra, blockchain infrastructure will advance. The focus for web3 builders will shift back to innovation, not token price charts. The path from meme coins to real utility may be long, but with the talent and creativity within the ecosystem, it’s far from impossible.
Home to over 60% of the global population, the Asia Pacific region is at the forefront of digital transformation – and at a turning point. The Asian Development Bank forecasts a USD 1.7T GDP boost by 2030, but only if regulation keeps pace with innovation. In 2025, that alignment is taking shape: regulators across the region are actively crafting policies and platforms to scale innovation safely and steer it toward public good. Their focus spans global AI rules, oversight of critical tech in BFSI, sustainable finance, green fintech, and frameworks for digital assets.
Here’s a look at some of the regulatory influences on the region’s BFSI organisations.
Click here to download “Greener, Smarter, Safer: BFSI’s Regulatory Agenda” as a PDF.
The Ripple Effect of Global AI Regulation on APAC Finance
The EU’s AI Act – alongside efforts by other countries such as Brazil and the UK – signals a global shift toward responsible AI. With mandates for transparency, accountability, and human oversight, the Act sets a new bar that resonates across APAC, especially in high-stakes areas like credit scoring and fraud detection.
For financial institutions in the region, ensuring auditable AI systems and maintaining high data quality will be key to compliance. But the burden of strict rules, heavy fines, and complex risk assessments may slow innovation – particularly for smaller fintechs. Global firms with a footprint in the EU also face the challenge of navigating divergent regulatory regimes, adding complexity and cost.
APAC financial institutions must strike a careful balance: safeguarding consumers while keeping innovation alive within a tightening regulatory landscape.
Stepping Up Oversight: Regulating Tech’s Role
Effective January 1, 2025, the UK has granted the Financial Conduct Authority (FCA) and Bank of England oversight of critical tech firms serving the banking sector. This underscores growing global recognition of the systemic importance of these providers.
This regulatory expansion has likely implications for major players such as AWS, Google, and Microsoft. The goal: strengthen financial stability by mitigating cyber risks and service disruptions.
As APAC regulators watch closely, a key question emerges: will similar oversight frameworks be introduced to protect the region’s increasingly interconnected financial ecosystem?
With heavy reliance on a few core tech providers, APAC must carefully assess systemic risks and the need for regulatory safeguards in shaping its digital finance future.
Catalysing Sustainable Finance Through Regional Collaboration
APAC policymakers are translating climate ambitions into tangible action, exemplified by the collaborative FAST-P initiative between Australia and Singapore, spearheaded by the Monetary Authority of Singapore (MAS).
Australia’s USD 50 million commitment to fintech-enabled clean energy and infrastructure projects across Southeast Asia demonstrates a powerful public-private partnership driving decarbonisation through blended finance models.
This regional collaboration highlights a proactive approach to leveraging financial innovation for sustainability, setting a potential benchmark for other APAC nations.
Fostering Green Fintech Innovation Across APAC Markets
The proactive stance on sustainable finance extends to initiatives promoting green fintech startups.
Hong Kong’s upcoming Green Fintech Map and Thailand’s expanded ESG Product Platform are prime examples. By spotlighting sustainability-focused digital tools and enhancing data infrastructure and disclosure standards, these regulators aim to build investor confidence in ESG-driven fintech offerings.
This trend underscores a clear regional strategy: APAC regulators are not merely encouraging green innovation but actively cultivating ecosystems that facilitate its growth and scalability across diverse markets.
Charting the Regulatory Course for Digital Asset Growth in APAC
APAC regulators are gaining momentum in building forward-looking frameworks for the digital asset landscape. Japan’s proposal to classify crypto assets as financial products, Hong Kong’s expanded permissions for virtual asset activities, and South Korea’s gradual reintroduction of corporate crypto trading all point to a proactive regulatory shift.
Australia’s new crypto rules, including measures against debanking, and India’s clarified registration requirements for key players further reflect a region moving from cautious observation to decisive action.
Regulators are actively shaping a secure, scalable digital asset ecosystem – striking a balance between innovation, strong compliance, and consumer protection.
Ecosystm Opinion
APAC regulators are sending a clear message: innovation and oversight go hand in hand. As the region embraces a digital-first future, governments are moving beyond rule-setting to design frameworks that actively shape the balance between innovation, markets, institutions, and society.
This isn’t just about following global norms; it’s a bold step toward defining new standards that reflect APAC’s unique ambitions and the realities of digital finance.
In my previous Ecosystm Insight, I spoke about Web3’s key initiatives in 2024 that caught my attention. As we navigate through the rapidly evolving tech landscape, I’ve chosen to highlight a few trends in the ecosystem that truly excite me – though this list is far from exhaustive. Interestingly, some of the most hyped trends, like the memecoin frenzy and AI agent platforms, didn’t pique my interest enough to dive deeper into.
Here are 7 trends I’ll be keeping an eye on in 2025.
Click here to download “Web3 Evolution: 2025 Trends To Watch” as a PDF.
1. Stablecoins: The Bridge Between Fintech and Crypto
In 2024, a significant shift occurred in how global fintechs view crypto, driven by stablecoins. What started as a collateral tool for crypto trading has now evolved into a proven solution for cross-border payments and remittances. Companies like Stripe, Revolut, Robinhood, and Nubank are expanding their role as crypto gateways, offering on and off-ramps alongside stablecoin-enabled payments. With global payment revenues projected to reach USD 3.3 trillion by 2031, traditional systems still face challenges like high fees, slow settlement times, and inefficiencies – issues that stablecoin rails are now set to address!
Expect more launches and M&A in this space as every web2 fintech becomes “crypto-ready”!
“Whether intentionally or because of their ability to support third-party apps, every fintech will become a crypto gateway. Fintechs will grow in prevalence and may perhaps rival smaller centralised exchanges in crypto holdings.” – PAUL VERADITTAKIT
2. Bringing Real-World Assets to DeFi: Simplifying Complexities
Over 12,500 DeFi pools currently serve around 7 million users, facing challenges such as onboarding, price discovery, liquidity management, and safeguards against arbitrage. It is expected that decentralised secondary marketplaces for trading real-world assets will be launched, aiming to simplify these complexities and potentially attract new users to DeFi.
3. Smart DePINs: The Rise of AI-Driven Coordination
More DePIN projects are expected to integrate AI and agentic computation to automate coordination, optimise demand and supply, and enhance interoperability. AI may also be used for tasks like node selection, choosing light nodes for accessibility and switching to heavier nodes for network reliability and redundancy. Nvidia’s embrace of DePINs like IPFS Filecoin could be a game-changer, with the company recently sharing potential approaches to leveraging decentralised data structures.
4. Web2.5: The Secret to Scaling Web3 Adoption
Tell me it’s crypto without telling me it’s crypto!
Prediction markets hit their stride in 2024, particularly with Polymarket and the elections, where most users didn’t even realise they were using blockchains. This could be the key to scaling web3 – enter web2.5. However, what is more exciting is the rise of the Telegram mini app ecosystem, the Worldcoin app store, and the Solana phone app store. These simple and intuitive web2-like interfaces are slated to bring more new and first-time users to web3 than some of the louder narratives like the AI-driven memecoin frenzy.
5. Proof-of-Humanity: Securing the Digital Self
While Tools for Humanity faced early criticism for scanning irises, the project, which now has over 20 million users, will gain more traction as people recognise the importance of proof-of-humanity. With the rise of AI-generated content and deepfakes, proof-of-humanity is becoming crucial – not just for combating Sybil attacks and frauds. Projects like SpaceID, Sign, and Mocaverse are also developing universal identity systems that enable users to access multi-chain services with a single private key or ID. Verifiable identity and credentialing via blockchains will be one of the most compelling use cases for the technology.
6. NFTs Reimagined: A New Era of Digital Assets
Story Protocol, which raised USD 80 million at a USD 2.25 billion valuation, aims to tokenise the world’s IP, placing originality at the heart of creative exploration and supporting creators. NFTs can be used not only for ID transactions, transfers, ownership, and memberships but also to represent and value assets. We can expect the emergence of many such NFT use cases beyond profile pictures, particularly in loyalty programs, brand memberships, and token-gated experiences. The second coming of NFTs is set for 2025!
7. Web3 Gateways: Wallets Evolve into Comprehensive Platforms
Similar to how browsers serve as gateways to the internet, web3 wallets like Metamask and Phantom are becoming essential entry points to the web3 experience. These wallets will evolve into all-encompassing platforms, integrating dApps and decentralised applications into their feature set. Along with enhanced security, leading wallets will soon offer services such as trading, gaming, minting, and token swapping, all directly within the wallet interface.
Ecosystm Opinion
It’s a reminder of how far we’ve come – and how much further we have to go. Yuval Noah Harari once pointed out that early use cases of the printing press were often conspiracy theories, and early Internet days were filled with chatrooms and adult content. We’re in the early stages of web3, and with each passing day, new use cases emerge.
This space is still unfolding, and it will be fascinating to see where it leads!
Southeast Asia’s banking sector is poised for significant digital transformation. With projected Net Interest Income reaching USD 148 billion by 2024, the market is ripe for continued growth. While traditional banks still hold a dominant position, digital players are making significant inroads. To thrive in this evolving landscape, financial institutions must adapt to rising customer expectations, stringent regulations, and the imperative for resilience. This will require a seamless collaboration between technology and business teams.
To uncover how banks in Southeast Asia are navigating this complex landscape and what it takes to succeed, Ecosystm engaged in in-depth conversations with senior banking executives and technology leaders as part of our research initiatives. Here are the highlights of the discussions with leaders across the region.
#1 Achieving Hyper-Personalisation Through AI
As banks strive to deliver highly personalised financial services, AI-driven models are becoming increasingly essential. These models analyse customer behaviour to anticipate needs, predict future behaviour, and offer relevant services at the right time. AI-powered tools like chatbots and virtual assistants further enhance real-time customer support.
Hyper-personalisation, while promising, comes with its challenges – particularly around data privacy and security. To deliver deeply tailored services, banks must collect extensive customer information, which raises the question: how can they ensure this sensitive data remains protected?
AI projects require a delicate balance between innovation and regulatory compliance. Regulations often serve as the right set of guardrails within which banks can innovate. However, banks – especially those with cross-border operations – must establish internal guidelines that consider the regulatory landscape of multiple jurisdictions.
#2 Beyond AI: Other Emerging Technologies
AI isn’t the only emerging technology reshaping Southeast Asian banking. Banks are increasingly adopting technologies like Robotic Process Automation (RPA) and blockchain to boost efficiency and engagement. RPA is automating repetitive tasks, such as data entry and compliance checks, freeing up staff for higher-value work. CIMB in Malaysia reports seeing a 35-50% productivity increase thanks to RPA. Blockchain is being explored for secure, transparent transactions, especially cross-border payments. The Asian Development Bank successfully trialled blockchain for faster, safer bond settlements. While AR and VR are still emerging in banking, they offer potential for enhanced customer engagement. Banks are experimenting with immersive experiences like virtual branch visits and interactive financial education tools.
The convergence of these emerging technologies will drive innovation and meet the rising demand for seamless, secure, and personalised banking services in the digital age. This is particularly true for banks that have the foresight to future-proof their tech foundation as part of their ongoing modernisation efforts. Emerging technologies offer exciting opportunities to enhance customer engagement, but they shouldn’t be used merely as marketing gimmicks. The focus must be on delivering tangible benefits that improve customer outcomes.
#3 Greater Banking-Fintech Collaboration
The digital payments landscape in Southeast Asia is experiencing rapid growth, with a projected 10% increase between 2024-2028. Digital wallets and contactless payments are becoming the norm, and platforms like GrabPay, GoPay, and ShopeePay are dominating the market. These platforms not only offer convenience but also enhance financial inclusion by reaching underbanked populations in remote areas.
The rise of digital payments has significantly impacted traditional banks. To remain relevant in this increasingly cashless society, banks are collaborating with fintech companies to integrate digital payment solutions into their services. For instance, Indonesia’s Bank Mandiri collaborated with digital credit services provider Kredivo to provide customers with access to affordable and convenient credit options.
Partnerships between traditional banks and fintechs are essential for staying competitive in the digital age, especially in areas like digital payments, data analytics, and customer experience.
While these collaborations offer opportunities, they also pose challenges. Banks must invest in advanced fraud detection, AI monitoring, and robust authentication to secure digital payments. Once banks adopt a mindset of collaboration with innovators, they can leverage numerous innovations in the cybersecurity space to address these challenges.
#4 Agile Infrastructure for an Agile Business
While the banking industry is considered a pioneer in implementing digital technologies, its approach to cloud has been more cautious. While interest remained high, balancing security and regulatory concerns with cloud agility impacted the pace. Hybrid multi-cloud environments has accelerated banking cloud adoption.
Leveraging public and private clouds optimises IT costs, offering flexibility and scalability for changing business needs. Hybrid cloud allows resource adjustments for peak demand or cost reductions off-peak. Access to cloud-native services accelerates innovation, enabling rapid application development and improved competitiveness. As the industry adopts GenAI, it requires infrastructure capable of handling vast data, massive computing power, advanced security, and rapid scalability – all strengths of hybrid cloud.
Replicating critical applications and data across multiple locations ensures disaster recovery and business continuity. A multi-cloud strategy also helps avoid vendor lock-in, diversifies cloud providers, and reduces exposure to outages.
Hybrid cloud adoption offers benefits but also presents challenges for banks. Managing the environment is complex, needing coordination across platforms and skilled personnel. Ensuring data security and compliance across on-prem and public cloud infrastructure is demanding, requiring robust measures. Network latency and performance issues can arise, making careful design and optimisation crucial. Integrating on-prem systems with public cloud services is time-consuming and needs investment in tools and expertise.
#5 Cyber Measures to Promote Customer & Stakeholder Trust
The banking sector is undergoing rapid AI-driven digital transformation, focusing on areas like digital customer experiences, fraud detection, and risk assessment. However, this shift also increases cybersecurity risks, with the majority of banking technology leaders anticipate inevitable data breaches and outages.
Key challenges include expanding technology use, such as cloud adoption and AI integration, and employee-related vulnerabilities like phishing. Banks in Southeast Asia are investing heavily in modernising infrastructure, software, and cybersecurity.
Banks must update cybersecurity strategies to detect threats early, minimise damage, and prevent lateral movement within networks.
Employee training, clear security policies, and a culture of security consciousness are critical in preventing breaches.
Regulatory compliance remains a significant concern, but banks are encouraged to move beyond compliance checklists and adopt risk-based, intelligence-led strategies. AI will play a key role in automating compliance and enhancing Security Operations Centres (SOCs), allowing for faster threat detection and response. Ultimately, the BFSI sector must prioritise cybersecurity continuously based on risk, rather than solely on regulatory demands.
Breaking Down Barriers: The Role of Collaboration in Banking Transformation
Successful banking transformation hinges on a seamless collaboration between technology and business teams. By aligning strategies, fostering open communication, and encouraging cross-functional cooperation, banks can effectively leverage emerging technologies to drive innovation, enhance customer experience, and improve efficiency.
A prime example of the power of collaboration is the success of AI initiatives in addressing specific business challenges.
This user-centric approach ensures that technology addresses real business needs.
By fostering a culture of collaboration, banks can promote continuous learning, idea sharing, and innovation, ultimately driving successful transformation and long-term growth in the competitive digital landscape.
The tech industry tends to move in waves, driven by the significant, disruptive changes in technology, such as cloud and smartphones. Sometimes, it is driven by external events that bring tech buyers into sync – such as Y2K and the more recent pandemic. Some tech providers, such as SAP and Microsoft, are big enough to create their own industry waves. The two primary factors shaping the current tech landscape are AI and the consequential layoffs triggered by AI advancements.
While many of the AI startups have been around for over five years, this will be the year they emerge as legitimate solutions providers to organisations. Amidst the acceleration of AI-driven layoffs, individuals from these startups will go on to start new companies, creating the next round of startups that will add value to businesses in the future.
Tech Sourcing Strategies Need to Change
The increase in startups implies a change in the way businesses manage and source their tech solutions. Many organisations are trying to reduce tech debt, by typically consolidating the number of providers and tech platforms. However, leveraging the numerous AI capabilities may mean looking beyond current providers towards some of the many AI startups that are emerging in the region and globally.
The ripple effect of these decisions is significant. If organisations opt to enhance the complexity of their technology architecture and increase the number of vendors under management, the business case must be watertight. There will be less of the trial-and-error approach towards AI from 2023, with a heightened emphasis on clear and measurable value.
AI Startups Worth Monitoring
Here is a selection of AI startups that are already starting to make waves across Asia Pacific and the globe.
- ADVANCE.AI provides digital transformation, fraud prevention, and process automation solutions for enterprise clients. The company offers services in security and compliance, digital identity verification, and biometric solutions. They partner with over 1,000 enterprise clients across Southeast Asia and India across sectors, such as Banking, Fintech, Retail, and eCommerce.
- Megvii is a technology company based in China that specialises in AI, particularly deep learning. The company offers full-stack solutions integrating algorithms, software, hardware, and AI-empowered IoT devices. Products include facial recognition software, image recognition, and deep learning technology for applications such as consumer IoT, city IoT, and supply chain IoT.
- I’mCloud is based in South Korea and specialises in AI, big data, and cloud storage solutions. The company has become a significant player in the AI and big data industry in South Korea. They offer high-quality AI-powered chatbots, including for call centres and interactive educational services.
- H2O.ai provides an AI platform, the H2O AI Cloud, to help businesses, government entities, non-profits, and academic institutions create, deploy, monitor, and share data models or AI applications for various use cases. The platform offers automated machine learning capabilities powered by H2O-3, H2O Hydrogen Torch, and Driverless AI, and is designed to help organisations work more efficiently on their AI projects.
- Frame AI provides an AI-powered customer intelligence platform. The software analyses human interactions and uses AI to understand the driving factors of business outcomes within customer service. It aims to assist executives in making real-time decisions about the customer experience by combining data about customer interactions across various platforms, such as helpdesks, contact centres, and CRM transcripts.
- Uizard offers a rapid, AI-powered UI design tool for designing wireframes, mockups, and prototypes in minutes. The company’s mission is to democratise design and empower non-designers to build digital, interactive products. Uizard’s AI features allow users to generate UI designs from text prompts, convert hand-drawn sketches into wireframes, and transform screenshots into editable designs.
- Moveworks provides an AI platform that is designed to automate employee support. The platform helps employees to automate tasks, find information, query data, receive notifications, and create content across multiple business applications.
- Tome develops a storytelling tool designed to reduce the time required for creating slides. The company’s online platform creates or emphasises points with narration or adds interactive embeds with live data or content from anywhere on the web, 3D renderings, and prototypes.
- Jasper is an AI writing tool designed to assist in generating marketing copy, such as blog posts, product descriptions, company bios, ad copy, and social media captions. It offers features such as text and image AI generation, integration with Grammarly and other Chrome extensions, revision history, auto-save, document sharing, multi-user login, and a plagiarism checker.
- Eightfold AI provides an AI-powered Talent Intelligence Platform to help organisations recruit, retain, and grow a diverse global workforce. The platform uses AI to match the right people to the right projects, based on their skills, potential, and learning ability, enabling organisations to make informed talent decisions. They also offer solutions for diversity, equity, and inclusion (DEI), skills intelligence, and governance, among others.
- Arthur provides a centralised platform for model monitoring. The company’s platform is model and platform agnostic, and monitors machine learning models to ensure they deliver accurate, transparent, and fair results. They also offer services for explainability and bias mitigation.
- DNSFilter is a cloud-based, AI-driven content filtering and threat protection service, that can be deployed and configured within minutes, requiring no software installation.
- Spot AI specialises in building a modern AI Camera System to create safer workplaces and smarter operations for every organisation. The company’s AI Camera System combines cloud and edge computing to make video footage actionable, allowing customers to instantly surface and resolve problems. They offer intelligent video recorders, IP cameras, cloud dashboards, and advanced AI alerts to proactively deliver insights without the need to manually review video footage.
- People.ai is an AI-powered revenue intelligence platform that helps customers win more revenue by providing sales, RevOps, marketing, enablement, and customer success teams with valuable insights. The company’s platform is designed to speed up complex enterprise sales cycles by engaging the right people in the right accounts, ultimately helping teams to sell more and faster with the same headcount.
These examples highlight a few startups worth considering, but the landscape is rich with innovative options for organisations to explore. Similar to other emerging tech sectors, the AI startup market will undergo consolidation over time, and incumbent providers will continue to improve and innovate their own AI capabilities. Till then, these startups will continue to influence enterprise technology adoption and challenge established providers in the market.
Technological advancements have paved the way for banks and financial institutions to broaden their services globally. However, despite ongoing efforts to tackle disparities in access, systemic biases persist, including those related to race, gender, income disparities, and unequal lending practices, contributing to financial inequality.
Prioritising financial inclusion is crucial for fostering global economic growth and AI plays a significant role in achieving this objective.
AI is enhancing financial inclusion by providing financial education and minimising fraud in transactions, empowering previously underserved populations.
The Impact of Financial Inclusion
Impact on Individuals
It is transformative for poverty reduction, empowering marginalised populations to save and invest, providing a tangible path out of poverty. Additionally, access to insurance and savings accounts enhances personal resilience, helping individuals navigate financial risks associated with unforeseen events like health crises, natural disasters, and economic downturns. Financial inclusion is the first step towards social equity.
Impact on the Economy
It fuels economic growth by supporting small businesses and entrepreneurs, fostering innovation, job creation, and overall development. Beyond individual empowerment, it plays a crucial role in addressing global challenges, particularly by facilitating climate action in communities most affected by climate change.
Many market participants recognise the profound impact that financial inclusion can have on the economy and are collectively taking action.
Here are some examples of how they are leveraging AI to promote financial inclusion.
Click here to download ‘Bridging Gaps: AI’s Role in Financial Inclusion’ as a PDF
