Conditions in 2010 were ripe for Uber. San Francisco was selling taxi medallions at US$250,000 while its taxi industry refused to improve, be it by tracking cabs or even accepting credit cards. The rest, as they say, is history. The city has not sold a single medallion since April 2016.

Worse, taxi associations across the globe could see the ride-hailing tsunami coming. Yet they dug in, buried their heads in the sand, and pressured governments to ban the apps. They, too, had sealed their own fate.

The similarities between taxis in the United States and most legacy banks in Southeast Asia today are uncanny: inefficient and unreliable service, dependent on protectionist systems, refusal to adapt to the new digital reality, and even widespread discrimination against certain client segments deemed low-value (like micro-businesses).

Even as 2020 arrived, legacy banks still expected regulators to protect them from neobanks and other digital usurpers. After all, how did the peer-to-peer (P2P) craze pan out in China in 2014? A proper meltdown. Banks sat safely ensconced in the knowledge that regulators had their backs, afraid of triggering another financial disaster.

But then the world stopped. COVID-19 all but destroyed the last barriers between neobanks and legacy brick-and-mortar players. The 2020 Google e-Conomy SEA report found that cash transactions had declined to just 37 percent of total transactions post-COVID, as more merchants shifted online and began accepting e-wallets.

Google now expects Southeast Asia to see gross transaction values for digital payments reach $1.2 trillion by 2025. Currently, digital payments account for 3 percent of consumer expenditures in ASEAN, a far cry from 30 percent in China, where digital banks like WeBank and AliBank are leveraging the transactional ecosystems of WeChat and Alibaba/Taobao, respectively.

Popular

State-sanctioned intolerance

Indonesia opts against visa fee hike to spur tourism

Jakarta library reopens to packed rooms, long queues