Southeast Asia Credit and Risk Management Market Size (2024 - 2029)

Southeast Asia Credit and Risk Management Market Analysis

The Southeast Asian credit and risk management market was valued at USD 220.8 million in the previous year and is expected to register a CAGR of 10.93%, reaching USD 406.1 million over the forecast period. Credit risk management solutions are essential to the long-term success of banking institutions and financial service providers in the Southeast Asian region because they provide the analysis of credit risks, the automation of lending and decision-making processes, and continuous risk monitoring.

• Credit risk management solution provides a centralized platform for storing consumer credit profiles, allowing financial organizations to instantly access essential data that would otherwise take time to locate. Many market vendors in the SEA region are developing AI-powered credit management systems enabling BFSIs to predict delayed transactions based on previous transaction volumes and payment habits, which can improve the credit decisions of the organization.
• The Southeast Asia region consists of many emerging countries, including Malaysia, Vietnam, Thailand, and the Philippines, which have been registering a significant growth rate in their economies for the past few years and have created a demand for capital inflows in the region through increasing purchasing power and MSME sector growth. According to the Asian Development Bank, there are over 71 million MSMEs in the SEA region. MSMEs dominate private sector businesses in Southeast Asia by contributing 97.7% of the market share, which is creating a demand for lending organizations in the region because qualified MSMEs can raise working capital from banks. Thus, the increasing trend of lending to individuals and enterprises in the SEA region is driving the market as BFSIs require credit and risk management solutions to minimize their credit risks. For instance, the S&P Global Ratings published a report stating that the Malaysian banking sector loan growth would be around 5 to 6% this year due to the country's economic stability, which would maintain Malaysian enterprises' and consumers' creditworthiness.
• In addition, Thailand has planned to establish banks to increase competition and improve financial inclusion in the country. According to a report by the Central Bank of Thailand, these digital banks should make it easier for underserved and unserved categories of retail and SME clients to obtain financial facilities, including credit services, which would increase the market opportunity for the credit and risk management solution providers in Thailand because these solutions can be used in automating the lending processes of the digital banks in the country.
• However, financial institutions are among the most strictly regulated industries in which regulatory agencies of the SEA region have specific risk management and compliance objectives that require specially designed credit and risk management solutions based on the needs of the business. These can be difficult to implement in the process and creates an additional burden on market vendors to design highly customized solutions. Thus, the complexity of the lending process and the need for highly reliable and customized credit and risk management solutions to predict an accurate major for lending is challenging the market adoption in the SEA region.
• Credit and risk management across the BFSI sectors in the SEA region transformed due to the COVID-19 pandemic as BFSIs had to adapt to the latest risk procedures, including new risk technology and risk-evaluation indicators. The need for the unification of various risk solutions, the use of AI technologies, and the enhancement of overall implementation processes have enhanced market growth in the post-pandemic time.

Southeast Asia Credit and Risk Management Industry Segmentation

The credit and risk management market is defined based on the revenue generated from the software and services used in various industries. The scope of the study has been segmented based on the deployment mode (cloud-based and on-premises) across Southeast Asia. 

The analysis is based on the market insights captured through secondary research and the primaries. The market study also covers the major factors impacting its growth in terms of drivers and restraints. The market sizes and forecasts are provided in terms of value (USD million) for the segments.