BUILDING DIGITAL TRUST IS KEY TO UNLOCKING ASEAN'S FINANCIAL FUTURE

KUALA LUMPUR, May 22 (Bernama) -- As ASEAN pushes forward in its digital transformation journey, addressing persistent issues such as hidden fees, lack of recourse and data privacy is essential to ensure no enterprise is left behind.

In an opinion article published by Bernama, Satvinder Singh, the ASEAN deputy secretary-general for the ASEAN Economic Community, and Thomas Beloe, the director of the United Nations Development Programme’s (UNDP) Sustainable Finance Hub, underscored the urgency of building a trustworthy digital ecosystem. 

They asserted that enhancing digital trust is key to unlocking access to formal credit, enabling entrepreneurs to grow their businesses and lift income. 

The article highlighted that digital payments are more than just a convenience, serving as a gateway to broader financial inclusion that, when built on trust and transparency, could significantly boost productivity and resilience for micro enterprises.

“Despite the increasing digital savviness, microenterprises still face hurdles in accessing much-needed financing. This is exacerbated by microenterprises’ mistrust in the digital ecosystem due to cases of fraud, hidden fees, and lack of recourse, which could potentially undermine their growth,” the authors said.

In Indonesia, for instance, only 41 per cent of merchants using the Quick Response Code Indonesian Standard (QRIS) completed at least one transaction per month, while 18 per cent remained dormant due to trust erosion from unexpected charges and unresolved disputes. “It is therefore imperative to build and ensure micro, small and medium enterprises’ (MSMEs) continued trust in digital payments and the broader financial ecosystem,” the writers said. 

To that end, the United Nations’ Better Than Cash Alliance, in collaboration with ASEAN Working Committee on Financial Inclusion (WC-FINC), has introduced the Trust Quotient Policy Toolkit, which is recognised by ASEAN ministers and central bank governors and reflects the region’s commitment to strengthening financial inclusion.

ASEAN is also making progress in regional financial connectivity through the commitment of the ASEAN Working Committee on Payment and Settlement Systems (WC-PSS), where several ASEAN member states, including Cambodia, Indonesia, Laos, Malaysia, Singapore, Thailand, and Vietnam, have successfully enabled cross-border Quick Response (QR) code payment and person-to-person funds transfers.

These improvements are real game changers as financial processes that used to take days can now be completed in minutes, enabling remittances, business payments, including e-commerce, and tourism-linked transactions.

According to the article, from Indonesia’s QRIS to Cambodia’s Khmer QR (KHQR) and Thailand’s PromptPay, the region is embracing digital payment solutions at a remarkable pace. Digital payment’s share of total transaction volume surged from just 48 per cent in 2022 to about 56 per cent in 2024.

The momentum is in sync with the progress in digital payments is also aligned with regional frameworks such as the ASEAN Digital Masterplan 2025, the Bandar Seri Begawan Roadmap, and the ASEAN Digital Economy Framework Agreement (DEFA), reflecting ASEAN’s collective vision for inclusive, accessible, and low-cost digital growth.

“Ensuring quick and seamless recourse mechanisms, particularly for small value disputes, is critical for fostering trust as delays or unresolved issues can significantly damage confidence,” they said.

As the chair and host of ASEAN 2025, Malaysia will convene the 46th ASEAN Summit and Related Summits at the KLCC from May 26 to 27, where the regional bloc is expected to deliberate on its digital future, among other key priorities.

In conjunction with the summit, two key high-level meetings - the 2nd ASEAN-Gulf Cooperation Council (GCC) Summit and the ASEAN-GCC-China Summit - will also take place, marking an important platform for expanded regional and inter-regional cooperation.

This full article can be read at Bernama.com.

-- BERNAMA