Banking institutions across Asia Pacific are under increasing pressure to modernise.

Whether in current or emerging markets, banks are riding the tide of a rapidly shifting landscape defined by digital technologies, adapting to regulatory requirements, rising customer expectations, and stiff competition from nimble fintech startups. Yet, legacy systems remain a primary reason why banks cannot keep up with the market and innovate fast enough.

Despite the advances in digital transformation, according to a news report by The Asian Banker, approximately 95% of banks in Asia are still using second and third generation banking technology. These old-school platforms were never designed to meet the demands of today’s always-on, customer-centric banking environment.

The outdated infrastructure, not only slows down innovation, but also has increased maintenance costs, often hard to scale due to local one time customisations, and hence inflexible when it comes to integrating new digital services of their own or from third party providers.

In an era where agility, speed, and resilience are paramount, legacy infrastructure is becoming a liability rather than an asset.

Asia-Pacific: The Nucleus Change

The Asia-Pacific region is home to some of the most advanced and dynamic digital economies in the world. From Singapore’s Smart Nation initiative to Australia’s Consumer Data Right (CDR) and Indonesia’s open banking ambitions, governments across the region are actively promoting digital transformation within the financial sector.

In fact, IDC forecasts that more than 70% of Asia Pacific banks surveyed have deployed their digital commerce applications over cloud, and at least 40% are considering changing their core banking systems in the next 3 years. This is not just a tech shift—it’s a strategic one, aimed at fostering innovation, reducing operational overhead, and to ensure that our infrastructure in the future can withstand disruptions.

Cloud and Modernisation: A Powerful Combination

Modernisation in banking isn’t just about “going digital.” It’s about building resilient, adaptive, and flexible systems that can adapt quickly to change. That future is not far off, in Malaysia, PwC’s 2023 Cloud Business Survey reports that 95% of banking and capital markets respondents are now, or will be in two years, fully on the cloud. While in India, the Reserve Bank recently issued updated cloud security guidelines, signalling a growing trust in cloud as a mainstream infrastructure.

Meanwhile, Thailand and the Philippines are developing national cloud frameworks to drive greater adoption across industries.

“Cloud computing plays a central role in regional transformation, providing the foundation we need.

One example of a cloud-native solution that has been designed to meet the evolving needs of financial institutions is BPC’s SmartVista,”

says Jonathan Bautista, Commercial Director for the APAC Region at BPC.

BPC’s SmartVista is a digital payments platform that enables banks, fintechs, and governments to manage a range of services including card issuing, digital banking, and real-time payments. For APAC banks intend to match the innovation pace of fintechs and challenger banks, a cloud-native foundation of infrastructure is no longer a nice to have but a first step.

Firstly, scalability lets institutions handle business operations and transactional surges without going in purchase of additional costly hardware, everything is already set. Accelerated product cycles from cloud-native DevOps pipelines such as containerisation, automated testing, and continuous deliveries help to cut release timelines from years to quarters to weeks.

“Built from the ground up using open-source components and modular architecture, SmartVista allows for seamless integration with cloud platforms such as AWS, OCI, and Google Cloud.

Its cloud-native design ensures that it remains flexible, scalable, and future-proof, empowering financial institutions to meet both current and future challenges. With microservices at its core, SmartVista offers a modular approach that enables continuous updates, faster testing, and improved fault tolerance,”

continues Bautista.

This gets crucial when one thinks of financial institutions managing high-volume, mission-critical transactions. By adopting next-generation platforms like SmartVista, financial institutions can accelerate their digital transformation, reduce operational overhead, and enhance their capacity for innovation.

With features such as low-code/no-code capabilities, open APIs, and cloud-readiness, next-gen issuing platforms like SmartVista have been shown to outperform traditional card processors, offering significant advantages in speed, scalability, and flexibility. This enables institutions to provide better, more agile services, meet evolving customer demands, and stay ahead in a competitive marketplace.

The Risk of Fragmented Modernisation in Asia Pacific Banks

That said, the road to modernisation is not without its challenges. Many institutions face what industry observers call the “cloud-exclusion trap”—where piecemeal upgrades or retrofitted solutions create fragmented ecosystems that are hard to integrate efficiently or get out of.

These half-measures often lead to technical debt, higher costs, and slower time-to-market for new products. Strategic planning and long-term vision are therefore essential. Successful modernisation projects usually follow a clear roadmap that balances short-term agility with long-term infrastructure evolution.

This includes decisions on architecture (cloud-native vs. monolithic), integration frameworks (APIs vs. custom connectors), and deployment models (hybrid, public, or private cloud).

A Collective Push Forward

Governments, regulators, and industry bodies are playing a critical role in accelerating modernisation.

Vietnam’s financial sector has experienced rapid growth and digitalisation, significantly driven by the State Bank of Vietnam’s National Digital Transformation Programme, which was launched in 2020.

This ambitious initiative aims to modernise the financial sector by setting clear development goals for 2025 and a long-term vision towards 2030. The government’s focus on fostering a more inclusive and tech-enabled financial ecosystem has spurred a wave of innovation, positioning Vietnam as a key player in Southeast Asia’s digital transformation journey.

In Cambodia, the National Bank of Cambodia (NBC) has been instrumental in advancing the country’s financial landscape. In October 2020, NBC launched Bakong, an integrated platform that connects Cambodian banks, microfinance institutions, and other financial entities.

This platform offers an all-in-one interface designed to enhance user efficiency and simplify transactions. Its peer-to-peer (P2P) network proved invaluable during the COVID-19 pandemic, allowing users to deposit, withdraw, and make online payments seamlessly.

NBC’s efforts have significantly bolstered the efficiency, inclusivity, and security of Cambodia’s payment systems. As digital payments soar, banks like ACLEDA Bank are leveraging technologies such as SmartVista to meet regulatory requirements and drive digital growth. With its flexible microservices-based architecture, SmartVista supports these advancements while ensuring compliance and enhanced operational agility.

Myanmar’s financial sector, under the Central Bank of Myanmar’s vision introduced in 2016, has also made remarkable strides in modernisation. The launch of CBM-NET2 in 2020 marked a significant milestone in fostering financial inclusion and creating nationwide connectivity for digital payments.

Additionally, the introduction of the Myanmar QR Code (MMQR) has simplified payment methods, enabling users to make secure and quick payments across the country. Despite these advancements, Myanmar continues to face challenges with financial inclusion, as more than 70% of the population remains unbanked, and only 2% of people hold debit cards. This highlights the immense opportunity for growth as the country progresses with digital banking and payments adoption.

Across the broader region, countries like Singapore and Australia are setting precedents with initiatives such as the Monetary Authority of Singapore’s (MAS) cloud migration grants and Australia’s APRA guidance on cloud risk management. These efforts further underline the growing commitment to cloud adoption and fintech integration across APAC.

In a recent survey, 60% of consumers in Southeast Asia said they prefer to go cashless, and more than 70% made do without cash for as long as 11 days, trying out new payment technologies.

This consumer-led momentum adds urgency to modernisation efforts—and accentuates the risk of falling behind in a very competitive marketplace.

Looking Ahead

As modernisation efforts expand across APAC, the region is poised for a wave of innovation in banking and financial services. Institutions that invest early in the right technologies and take a holistic approach to upgrading legacy systems will be better positioned.

The key is to view modernisation not as a one-off IT project but as an ongoing transformation—one that requires cross-functional collaboration, tactical investment, and a clear understanding of both current and future business needs.

In a region defined by its diversity and dynamism, modernisation is no longer optional. It’s the foundation for long-term resilience and relevance.

Featured image: Edited by Fintech News Singapore. Source images: AI-generated by Freepik and contributed by 21ST, via Freepik.