March 12, 2024 — Asia’s regional and biggest local banks are winning business and relationships with large companies across the Asia-Pacific region.

Just five years ago, only about 1 in 5 large Asian corporates named a large local Asian bank as one of their corporate banking providers, and only 9% used one of Asia’s regional banks. In 2023, nearly one-quarter of large Asian companies reported employing a large local Asian bank, and 13% were using a regional bank. 

“Asian banks are expanding their capabilities and improving the quality of service they deliver—including in the digital banking space,” says Ruchirangad Agarwal, Relationship Director and Head of Corporate Banking – Asia and Middle East at Coalition Greenwich, and co-author of Asia’s Regional and Large Local Banks Are on the Rise. “Those improvements have put them in a position to compete for relationships, as large Asian companies work to diversify their list of providers in corporate banking and cash management.”

Global banks provide digital platforms that are clearly superior to offerings from most competitors in Asia and elsewhere, and those robust capabilities have helped them enhance client experience and allow them to win business in markets around the world. However, as digital banking becomes ubiquitous, it is getting harder to differentiate among digital offerings. 

At the same time, the biggest Asian regional banks have upgraded their digital capabilities. That improvement has been most pronounced at DBS, which is now regarded as the No. 1 regional bank in Asia for overall digital experience by large corporate clients. 

“For an increasing number of large Asian corporates, the digital capabilities offered by regional and local banks may warrant a spot on their list of providers—especially given the role of many of these banks as credit providers,” says Ruchirangad Agarwal.

ESG: Mainstream and More Mature 
The share of large Asian corporates with established ESG targets is climbing rapidly and is now at approximately 75%. There is reason to believe that ESG adoption rates will increase further in the coming months. In 2022, almost 40% of large Asian corporates without ESG targets said their companies simply saw no need to adopt these goals. In 2023, that share fell to 22%. Today, companies without established ESG programs are more likely to report that their adoption has been slowed by a lack of funding, expertise or other resources, or to say that they are actively working to put ESG targets in place.

“The growing number of holdouts who now recognize the need to establish ESG policies represents an opportunity for banks to forge tighter relationships with Asian corporates by helping them design and implement ESG targets and programs,” says Ruchirangad Agarwal.