A Wake-Up Call for Traditional Banks

In the time it takes a traditional bank to process a loan application, a digital bank has already approved it, disbursed the funds, and sent the customer a satisfaction survey.

Across Southeast Asia, digital banks are accelerating ahead—leveraging artificial intelligence (AI), automation, and integrated ecosystems to redefine what modern banking looks like. They’re not just changing processes; they’re reshaping customer expectations. And traditional banks are struggling to keep up.

The numbers speak volumes. Digital banks in Southeast Asia are projected to reach a net interest income of US$19.92 billion by 2029, growing at a steady 5.6% CAGR. This isn’t just market optimism—it’s a reflection of how deeply digital financial services are taking root in the region’s platform economy, addressing financial inclusion and catering to an increasingly tech-savvy population.

But this transformation is creating a divide. One side is agile, digital-native, and data-driven. The other is burdened by legacy systems, outdated processes, and slower decision-making. For traditional banks, the message is clear: adapt now or risk becoming irrelevant.

The Unfair Advantage: What Digital Banks Do Differently

Digital banks didn’t just enter the market with new tools—they entered with a new mindset. Free from the constraints of legacy infrastructure and traditional hierarchies, they’ve been able to build systems and services around what customers want today, not what worked yesterday.

They harness data, not just collect it.
Digital banks excel at using AI and real-time analytics to understand customer behaviour, predict needs, and offer hyper-personalised products. From budgeting suggestions to investment recommendations, every interaction is informed, tailored, and timely.

They move at speed.
Where traditional banks see complexity, digital banks see opportunity. Without layers of legacy architecture, they can roll out new features, test products, and integrate emerging technologies in weeks—not months. Some are already using machine learning to approve credit applications in real-time, cutting what was once a multi-day process down to minutes.

They engage customers proactively.
Chatbots, virtual assistants, and 24/7 support powered by AI have raised the bar for customer engagement. These aren’t just service channels—they’re intelligent, always-on touchpoints that learn and improve with every interaction.

They scale without the sprawl.
Without the cost and limitations of physical branches, digital banks operate lean. Automation drives everything from compliance to fraud detection, enabling them to scale quickly and sustainably.

They’re building ecosystems, not just apps.
Through open banking and APIs, digital banks plug into everything from e-commerce to lifestyle services. The result? A one-stop ecosystem where banking fits naturally into the customer’s digital life—and keeps them coming back.

This combination of agility, automation, and customer-first thinking isn’t just an edge—it’s a whole different playing field. And for traditional banks, closing this gap starts with understanding how these strategies are executed in practice.

What’s Holding Traditional Banks Back

While digital banks surge forward, many traditional banks in Southeast Asia find themselves stuck—caught between the pressure to transform and the weight of legacy systems that resist change. The obstacles aren’t new, but in today’s environment, they’re becoming harder to ignore.

Legacy systems are slowing everything down.
Outdated core banking systems remain one of the biggest blockers to innovation. They make it difficult to integrate new technologies, add significant cost to operations, and create silos that prevent data from being fully leveraged. The result? Slower time to market and inconsistent customer experiences.

There’s a growing tech talent gap.
Digital transformation demands digital talent—and in Southeast Asia, the shortage is real. A recent survey revealed that 9 out of 10 companies in the region face challenges in recruiting and retaining tech-savvy professionals. Digital banks, with their startup culture and agile workflows, often win the talent war before traditional banks can even join the conversation.

Operational inefficiencies are still common.
Manual processes, multi-step approvals, and fragmented systems are still prevalent in many traditional banks. These inefficiencies don’t just slow things down—they impact the customer experience and leave banks vulnerable to more agile competitors.

They’re missing out on ecosystems.
Digital banks are actively embedding themselves in customers’ lives through strategic integrations with lifestyle, e-commerce, and travel platforms. Traditional banks, on the other hand, are often hampered by compliance concerns, slow partner onboarding, and siloed innovation teams—causing them to miss out on ecosystem-driven growth.

The culture doesn’t always favour change.
Perhaps the most difficult hurdle is internal resistance. Whether it’s risk-averse leadership or departments working in silos, the cultural shift required to truly embrace innovation is one of the biggest challenges traditional banks must overcome.

But here’s the good news: every one of these challenges represents a strategic opportunity. The next section explores exactly how traditional banks can begin to turn these obstacles into competitive advantages.

What Needs to Change—Now

The gap between digital and traditional banks isn’t permanent—but closing it requires more than surface-level upgrades. It demands a deliberate shift in mindset, infrastructure, and strategy. For traditional banks in Southeast Asia, the path forward is clear—and urgent.

1. Modernise your core systems.
   To move faster and serve better, banks need to leave behind the constraints of outdated infrastructure. Cloud-native core banking platforms provide the flexibility to scale, launch new products quickly, and integrate seamlessly with third-party services.
2. Build with partnerships, not just products.
   Collaborating with fintechs, startups, and technology providers can fast-track innovation. From embedded finance to API-led services, partnerships unlock capabilities that would take years to build internally—and give banks the agility to meet evolving customer needs.
3. Redesign the customer experience around digital.
   Today’s consumers expect intuitive, seamless, and personalised journeys—across every touchpoint. Whether it’s onboarding, servicing, or retention, banks need to prioritise experiences that are mobile-first, AI-enabled, and customer-led.
4. Prioritise talent and culture.
   Digital transformation isn’t just about tools—it’s about people. Investing in upskilling, attracting digital talent, and fostering a culture of experimentation is key to embedding agility and innovation into the organisation’s DNA.
5. Expand reach through financial inclusion.
   With over 60% of Southeast Asians still unbanked or underbanked, there’s a huge opportunity to reach new customers through mobile-first, low-cost solutions. Digital banks have proven that inclusion drives growth—traditional banks can do the same with the right approach.

Change doesn’t have to happen all at once. But it does need to start. The question isn’t whether transformation is necessary—it’s whether you’re ready to lead it.

How JurisTech Helps Banks Bridge the Divide

At JurisTech, we’ve seen first-hand how the right technology can help traditional banks move faster, serve smarter, and compete stronger. We work with financial institutions across Southeast Asia to close the digital divide—bringing together AI, automation, and customer-first design to drive real impact.

Whether you’re modernising your credit decisioning process or reimagining your digital onboarding journey, our suite of software solutions is built to tackle the very challenges discussed in this article:

• Our composable AI platform, Juris AICraft powers intelligent decision-making by combining AI, data, and business logic to drive automation and consistency in operational workflows.
• Our autoML and AI platform, Juris Mindcraft equips banks with machine learning and predictive analytics capabilities to personalise services and anticipate customer needs.
• Our auto-decisioning engine, Juris DecisionCraft streamlines loan and credit evaluations with real-time decision engines—improving turnaround time while reducing risk.
• Our end-to-end digital banking platform, Juris Spectrum enables banks to build end-to-end digital experiences, from onboarding to servicing, without disrupting existing systems.

Our solutions have helped banks reduce costs, scale operations, and deliver experiences that meet the expectations of today’s digital-first consumers. But more than that, we’re a partner—here to guide your transformation and ensure you stay ahead of the curve.

Ready to Lead the Change?

The future of banking in Southeast Asia belongs to institutions bold enough to modernise, adapt, and innovate. If you’re ready to explore what that future could look like for your bank, we’d love to show you how.

Schedule a free demo or reach out to us at contact@juristech.net. Let’s bridge the digital divide—together.

About JurisTech

JurisTech is a global leading company, specialising in enterprise-class lending and recovery software solutions for banks, financial institutions, telecommunications, and automobile companies worldwide. JurisTech has been mentioned as a Representative Provider for Lending Ecosystems, as a Representative Vendor for Commercial Loan Origination Solutions, and as a Sample Vendor for Commercial Banking Onboarding across Gartner reports in 2024.

We power economies by reimagining financial services with cutting-edge software solutions, leveraging composable architecture and generative AI. Our offerings include artificial intelligence (AI), auto-decisioning, digital customer onboarding, loan origination, credit scoring, loan documentation, litigation, and debt collection.

Our solutions have enabled businesses across a broad array of industries to undergo digital transformation, providing enhanced customer experiences and, most importantly, achieving their business goals.