June 13, 2025
Banks across the Asia Pacific region are feeling the pressure to modernise amid a fast-evolving digital landscape. Regulatory shifts, rising consumer expectations, and intense competition from agile fintech firms are accelerating this push. Yet, outdated legacy systems remain one of the biggest roadblocks preventing banks from keeping pace.
Despite strides in digital transformation, approximately 95% of banks in the region still rely on outdated second- and third-generation technologies, according to The Asian Banker. These systems, originally built for a different era, are ill-equipped to support the always-on, customer-first demands of modern banking. They drive up maintenance costs, hinder scalability due to one-off local customisations, and lack the flexibility to integrate new, advanced digital services.
As digital transformation becomes non-negotiable, legacy tech is turning from an asset to a liability. In contrast, APAC is also home to some of the most advanced digital initiatives, with nations like Singapore, Australia, and Indonesia leading the charge through forward-thinking policies like Smart Nation, the Consumer Data Right (CDR), and open banking strategies.
IDC predicts that over 70% of surveyed banks in Asia Pacific have deployed digital commerce apps on the cloud, with 40% planning to overhaul core banking systems within three years—a move aimed at enhancing innovation, reducing costs, and building resilient, future-ready infrastructure.
Cloud: The Foundation of Future Banking
Modernisation goes beyond digitisation. It’s about building systems that can evolve quickly. In Malaysia, PwC reports that 95% of financial institutions are already cloud-based or plan to be within two years. India’s Reserve Bank has issued guidelines supporting cloud adoption, while Thailand and the Philippines are drafting national cloud strategies.
“Cloud computing is foundational for financial transformation,” says Jonathan Bautista, Commercial Director for APAC at BPC. He highlights BPC’s SmartVista platform as a cloud-native, modular digital payment solution that supports everything from card issuance to real-time payments. With built-in scalability, SmartVista allows banks to streamline operations, cut down on product release cycles, and easily manage high transaction volumes.
Its flexible, open-source architecture allows seamless integration with AWS, Google Cloud, and OCI. Microservices and DevOps pipelines ensure that the platform remains scalable and agile, enabling banks to respond faster to market needs and customer demands.
Avoiding the “Cloud-Exclusion Trap”
However, fragmented upgrades and temporary fixes often lead to what experts call the “cloud-exclusion trap.” Banks may find themselves stuck with incompatible systems that increase technical debt, operational costs, and time-to-market. True digital transformation requires strategic planning and long-term vision, with a clear roadmap, strong API frameworks, and modern cloud-native deployment models.
The Role of Governments and Regulators
Governments across APAC are key drivers of financial modernisation. In Vietnam, the National Digital Transformation Programme launched by the State Bank has fast-tracked innovation. Cambodia’s National Bank launched Bakong, an integrated P2P platform that enhances transaction efficiency and inclusivity, proving essential during the pandemic.
In Myanmar, the introduction of CBM-NET2 and the national QR code (MMQR) has simplified payments and expanded digital access. However, challenges remain, as the unbanked population still exceeds 70%. Banks like ACLEDA are using SmartVista to improve compliance and scale services.
In Singapore, the Monetary Authority offers cloud migration grants, and Australia’s APRA provides risk guidance—both showing strong public-sector support for fintech integration.
Modernisation Is Not Optional
Consumer behaviour is also accelerating this shift. Over 70% of Southeast Asian consumers report going cashless for extended periods, increasing the demand for innovative digital payment methods.
Looking ahead, the pace of innovation in APAC banking will depend on the ability of institutions to invest in holistic, long-term digital strategies. Modernisation must be approached as an ongoing journey—integrating new technologies, upskilling teams, and maintaining a clear focus on future needs.
In an increasingly dynamic region, transformation isn’t a trend—it’s the only path to resilience, relevance, and growth.
