Embedded finance, synthetic intelligence (AI), and stablecoins are rising as key drivers of Southeast Asia’s subsequent digital progress wave, shaping alternatives throughout agentic commerce, immediate cross-border funds, and hyper-personalization, in accordance to a brand new research by HSBC, Google Cloud, and Funds and Commerce Market Intelligence (PCMI).
The survey, performed between December 2024 and Could 2025, polled greater than 2,400 respondents throughout six of Southeast Asia’s greatest international locations to determine the key tendencies reworking how companies, entrepreneurs, and shoppers create and change worth throughout the area.
Embedded finance turns into mainstream
The analysis highlights a number of tendencies shaping the way forward for the area’s digital financial system, emphasizing the surge of embedded finance, with demand persevering with to develop.
In response to the research, 77% of shoppers in Southeast Asia use embedded finance by way of wallets, purchase now, pay later (BNPL), or in-app loans, reflecting the robust attraction of those capabilities. Moreover, 75% see embedded finance as “essential” or “helpful”, underscoring its comfort, and alignment with present shopper expectations.
Shoppers additionally recognized embedded finance merchandise as vital to enhancing their digital banking expertise. When requested which options would enhance their expertise with digital banking apps, shoppers expressed robust curiosity in embedded companies, rating integration with social media because the quantity two characteristic that might enhance their expertise. As well as, one in three shoppers need monetary companies messaging apps, and one in 4 need these companies in gig platforms and different on a regular basis apps.
Demand for embedded credit score on the rise
Inside embedded finance, BNPL is seeing the strongest demand. 66% of the shoppers polled for the research need to see BNPL extra usually when making purchases and 48% need to see immediate loans.
Wanting extra intently on the profile of BNPL adopters in Southeast Asia, the research discovered that, opposite to standard assumptions, BNPL customers are usually higher-income people reasonably than lower-income, financially underserved demographics looking for various sources of credit score.
In truth, 61% of BNPL customers are within the high two revenue quartiles. Furthermore, these individuals are likely to rank significantly larger than the typical for bank card possession, at 69% versus 45%. They’re additionally way more digitally-savvy, with 75% utilizing digital platforms to make transactions every day.
These findings counsel that higher-income, digitally assured shoppers are driving BNPL progress in Southeast Asia, leveraging these options as a method to optimize spending and lengthen buying energy. This factors to vital progress potential throughout discretionary and premium classes, equivalent to luxurious items, high-end electronics, journey, and way of life companies.
A fertile floor for agentic commerce
AI is one other key development highlighted within the report, with speedy advances within the know-how paving the way in which for agentic commerce. Agentic commerce refers to using autonomous AI brokers that may act on behalf of shoppers or companies. These AI brokers can discover, examine, and doubtlessly make purchases for purchasers primarily based on their wants and preferences, aiming to reinforce buyer expertise, comfort, and effectivity.
Outcomes from the research present that Southeast Asia provides fertile floor for agentic commerce, as many shoppers are comfy trusting AI with their private knowledge. In truth, 73% of surveyed belief AI with their private knowledge, or at minimal don’t distrust it.
Moreover, governments and organizations throughout the area are actively making ready companies to undertake autonomous AI programs. In Singapore, for instance, the Cyber Safety Company of Singapore (CSA) launched in October Securing Agentic AI: an Addendum to the Tips and Companion Information on Securing Synthetic Intelligence (AI) Methods, offering sensible steerage for system house owners to safe agentic AI programs.
Analysis from SS&C Blue Prism estimates that over a 3rd of Singaporean organizations plan to deploy agentic AI by 2026. A research by IDC discovered that about 70% of Asia Pacific (APAS) organizations anticipate agentic AI to disrupt enterprise fashions by year-end 2026.
The HSBC, Google Cloud, and PCMI report expects stablecoins to speed up the shift in the direction of agentic AI, enabling the arrival of “always-on commerce” with bots creating totally autonomous commerce flows. AI brokers will resolve what to purchase, promote, make investments, or pay for, whereas stablecoins will make sure the transactions are executed precisely as supposed, following preset situations equivalent to quantity, service provider sort, and fee technique.
AI-personalization as a brand new normal
In Southeast Asia, AI personalization has grow to be frequent apply. This development, which first emerged in e-commerce, has since expanded into finance. At present, 88% of Southeast Asian shoppers are accustomed to personalization in monetary companies.
Personalization has even grow to be an expectation for many, with 84% of respondents saying that they’re keen or would contemplate switching to a financial institution or fee supplier that provides extra customized companies.
Respondents recognized budgeting intelligence (53%) as essentially the most desired AI-personalized monetary characteristic, adopted by funding recommendation (48%) and spending insights (43%).
Instantaneous funds surge, however gaps stay
Throughout Southeast Asia, immediate funds have grow to be ubiquitous, pushed by fee modernization efforts and quicker fee rails. Digital funds by e-wallets and account-to-account (A2A) are actually overtaking bank cards in transaction worth, accounting for 58% of cashless transactions.
Regardless of the rise of real-time funds, a number of trade vertical stay underserved. Throughout the area, 32% of shoppers reported experiencing sluggish processing instances and 42% of enterprise house owners reported sluggish funds as a problem of their enterprise. That determine is even larger in Malaysia and Vietnam, at 50% and 52%, respectively.
Southeast Asian shoppers cited refunds for returns, alongside insurance coverage payouts, and cross-border funds, as essentially the most under-performing verticals for fast-payments.
Actual-time cross-border funds take middle stage
One other key development highlighted within the HSBC, Google Cloud, and PCMI report is the elevated deal with delivering immediate cross-border funds. On this subject, two main developments are emphasised: Undertaking Nexus, and the proliferation of stablecoins.
Undertaking Nexus, led by the Financial institution for Worldwide Settlements, focuses on linking home immediate fee programs throughout international locations for quicker and lower-cost cross-border funds. Indonesia, Malaysia, the Philippines, Singapore, Thailand, and the Eurosystem, are amongst these a part of the initiative.
In response to the report, the implications for Undertaking Nexus are huge. For e-commerce platforms and retailers, the know-how is poised to develop the dimensions of their addressable market by rising using QR code funds and cellular wallets, boosting conversion charges. For cash remitters, it’s poised to make payout less complicated and extra uniform throughout the area.
Stablecoins decide up steam
Alongside Undertaking Nexus, digital currencies are seeing elevated adoption. 12% of Southeast Asian respondents in PCMI’s survey use digital currencies weekly. In Singapore, the SGD-pegged stablecoin, XSGD, is exhibiting robust traction, recording over 8 billion in transaction quantity as of mid-2025.
Regulatory readability is additional accelerating adoption. For instance, Singapore launched a stablecoin regulatory framework in 2023 to make sure a excessive diploma of worth stability for stablecoins regulated in Singapore. The Financial Authority of Singapore (MAS) is at the moment working on legislative amendments to formalize the framework.
This readability has prompted international gamers like Circle and Ripple to develop operations in Singapore to assist enterprise use circumstances, illustrating that the area is well-positioned for institutional adoption.
Featured picture: Edited by Fintech Information Singapore, primarily based on picture by pikisuperstar by way of Freepik
