Deloitte, in partnership with the INCLUSION Fintech Conference, has published the first-ever South and Southeast Asia digital life index in a report titled, “The Next Wave: Emerging Digital Life in South and Southeast Asia”. This report was launched at the inaugural INCLUSION Fintech Conference in September 2020 to foster a global dialogue on building a more inclusive, green and sustainable world through digital technology.

Through an extensive survey conducted across age groups in eight countries in South and Southeast Asia, specifically Singapore, Malaysia, Thailand, Indonesia, the Philippines, India, Bangladesh and Pakistan, the report shows that consumers aged between 21 and 40 years are the leading force enabling the rapid adoption of a digital life in the region in the post-Covid-19 world, with 78% of those surveyed in the age group indicating they have increased their use of digital services.

According to Taylor Lam, Technology, Media & Telecommunications Industry Leader at Deloitte China, “young and vibrant economies in South and Southeast Asia are rapidly becoming the next wave of future leaders in digital economy. The combination of a relatively large, young, unbanked and underbanked population, high mobile penetration and supportive local governments has helped the region leapfrog in its digital infrastructure and innovations, which has accelerated the adoption of digital payment and the expansion of daily digital life scenarios in the region”.

“Through our research, we have seen great potential for these digital economies to continue maturing and become more inclusive, more convenient and secure, and more sustainable, which will benefit their recovery from the impact of the Covid-19 pandemic,” says Mr Lam. This article discusses the key insights from the report.


Maturing mobile digital ecosystems in China, Japan and South Korea have set the backdrop for manufacturers of mobile phones and mobile applications to look to emerging markets, with Southeast Asia and parts of South Asia becoming one of the most eye-catching regions. In fact, as emerging regions, South and Southeast Asia are expected to become the engine that drives global digital life into a new era.

There are four reasons behind the rise of South and Southeast Asia’s digital consumption:

1) Collectively, South and Southeast Asia’s population is large in size and young in age. Many have no bank accounts or insufficient access to banking services, and this has propelled the growth of digital payment in the two regions; their young population became “digital natives”, and are boosting digital life and consumption through demographic dividends.

2) The high penetration of smartphones and extensive use of mobile applications have become the core of local digital life.

3) The penetration of smartphones has advanced the use of mobile applications, for example, social media, live webcasts, mobile phone games, e-commerce and digital payment, with users more inclined to use mobile e-commerce than their peers in developed economies.

4) Most countries in the two regions saw the importance of the digital economy early on and have introduced policies that support its development and facilitate the construction and promotion of digital infrastructure.

The potential of digital payment

Digital payment has boundless potential. In just two years from 2017 to 2019, global users of electronic wallets skyrocketed from 500 million to 2.1 billion, with developing countries accounting for the lion’s share of the increase, and China and India having a combined 70% of all users. In 2019, digital payment developed at an unprecedented speed. Mobile currency was initially a product for a small number of specific markets. It has now become a global phenomenon and shown surprising growth in emerging markets, benefiting an extensive group of users.

China, Japan and South Korea hold a safe lead in terms of the quantity and scale of digital payment use. In China, the proportion of digital payment is as high as 86% and its popularity is about three times the average global level. Because of their large population bases, India and Indonesia have reached the second echelon in digital payment volume.

However, across other countries in South and Southeast Asia, this trend is still at an initial stage and there is much room to grow.

Overall, with the exception of Singapore, countries in the two regions feature underdeveloped financial systems and an insufficient supply of traditional financial services which, together with their huge gaps in urban-rural Internet development, create a large space for digital payment to thrive. In a very positive development, several national governments have launched basic digital hardware projects to accommodate 4G and 5G networks, creating broad prospects for the financial technology sector in South and Southeast Asia, which set the stage for increases in digital payment volume. These government actions further highlight the fact that numerous needs have not been met yet. When these needs are met, the massive potential of both regions’ digital finance will be unleashed.

Digital payment has also become the new conduit for flow and value. With the sharp rise in Internet and smartphone popularity, maturing digital payment operability, lower transaction costs and greater convenience, digital payment transactions accounted for a large portion of fund flows for the first time in 2019, and the flow of new funds into digital payment is inexorable. For customers, this marks a shift from traditional cash payment to digital payment. For the digital payment sector, the constant entrance of more digital products into the hands of low-income users makes it vital to ensure these are user-centric, relevant and able to meet real needs.

In addition, the Covid-19 pandemic has accelerated the adoption of “zero contact” digital payment as it allows the avoidance of contact with currency to ensure safety and hygiene. Since the Covid-19 outbreak, about 78% of the research participants indicated that they have experienced some increases in the usage of digital services, in which 41% indicated a surge.

Continuous innovations have been made in “zero contact” payment platforms to provide more services during the epidemic, including wage payment, donations and entertainment.

Overall, with the exception of Singapore, countries in the two regions (South and Southeast Asia) feature underdeveloped financial systems and an insufficient supply of traditional financial services which, together with their huge gaps in urban-rural Internet development, create a large space for digital payment to thrive.


It was found through the survey that young adults aged 21 to 40 lead the richest digital lives in terms of the variety of digital life use scenarios. Digital payment, as a key enabler, is enhancing digital life for consumers, resulting in fundamental shifts in social interactions, financial services, digital entertainment, daily life services and shopping habits (Figure 1).

Figure 1 Portrait of digital payment in South and Southeast Asia

Source: Deloitte Research

The top three most common daily life scenarios where consumers choose to use digital payment are e-commerce/m-commerce (70%), peer-to-peer transfer (69%) and in-store purchase (62%). The majority of digital payment transactions are small in value – 67% of research participants indicated that the average value per transaction is lower than US$30 per person. This indicates that digital payment has penetrated consumers’ daily lives and has become the mainstream to meet their everyday needs.

The top three reasons why consumers opt to use an e-wallet are convenience (77%), its contactless nature (69%) and the value-added benefits and promotions they can enjoy (9%).

Figure 2 Four main digital payment scenarios in South and Southeast Asia

Source: Deloitte Research

Looking at mobile apps, the top most popular areas where digital payment is applied are:

  • Entertainment: this includes social media (79%) and music/video streaming (50%);
  • E-commerce (74%): convenience, product variety and low price are the top three reasons for consumers to choose to shop online;
  • Daily life services (59%): ride-hailing, news and books, and workplace collaboration are the top three most often used apps in this category;
  • Financial services (45%): mobile banking and digital payment are the most used apps.

In addition, compared with mature models of digital payment in other countries, South and Southeast Asian countries demonstrate the following characteristics:

  • There is a continued preference for cash for reasons such as consumer habits; also, as digital payment in many of these countries rely more on the e-wallet model, it enables a ready exchange for cash.
  • These countries need to rely on offline channels, such as convenience store networks, to connect consumers due to wide gaps in the availability of traditional finance and weak binding relationships among digital payment, bankcards and bank accounts.
  • Differences in per capita income result in variations of smartphone penetration; the various modes of digital payment adopted by countries range from PIN codes and QR codes to biometrics.


The regional Digital Life Index is developed based on the research and on a series of parameters including mobile phone penetration, mobile Internet speed, digital payment maturity, online shopping maturity, digital security, social media activity and policy support.

Figure 3 Digital life leaders in South and Southeast Asia

Source: Surfshark, Google & TEMASEK, GSMA, Statista, Globalweb Index, Deloitte Research

Singapore and Malaysia have become digital life “leaders”. Judging from various indicators, they are leading participants in the digital economy, driven by strong government support, broad public participation and good infrastructure.

There is a group of “following” countries that are poised to catch up. Thailand is a good example. Its per capita income is relatively high, which leads to high smartphone penetration. It therefore has excellent social media activity, maturity of online shopping and digital payment indicators. In the Philippines, the penetration rate of mobile phones needs to be improved, but it has strong advantages in digital money transfer, e-sports live broadcasts and other segments.

Although digital applications are not as rich as in the leading countries, the digital economies in the follower countries are on the verge of expansion. With good digital foundations and effective policy promotion, they can rapidly catch up with the leading countries.

In South Asia, India has outstanding achievements in some indicators, especially network security. However, because of a wide income gap, it still faces challenges such as slow Internet speed and a preference for cash payment.

Bangladesh and Pakistan have the farthest to catch up. Due to slower social and economic development, their digital infrastructure and mobile phone penetration rates are some way behind those of other countries. However, this does not mean they are digital life “deserts”. On the contrary, some of the digital services rooted in their national conditions have become vigorous sources of economic development. As their digital infrastructure improves, and amid the influence of China and other leading countries in the digital economy, these “challenger” countries will become a new and huge potential market for the digital economy in Southeast and South Asia.


There is no doubt South and Southeast Asia will see rapid developments in digital life. However, there are still several areas that can be improved, especially digital infrastructure, consumer development, information security, and policy coordination.

Governments can play a strong role in promoting digital life by setting up a uniform standard for identification and electronic payment, determining and supervising a uniform payment standard, and using policy tools to drive the popularisation of digital payment. Looking to the future, the governments of many countries will construct basic payment platforms and facilities; third-party platforms will continuously innovate their technologies and services and comprehensively promote digital payment models in multiple online and offline scenarios, and digital payment in these countries will advance quickly towards more widespread, faster and more secure use.

And, as the digital infrastructures in South and Southeast Asia improve, the richness of digital life will be unprecedented and contribute to the economies and potential of countries in both regions.

This article was contributed by Deloitte China and Deloitte Southeast Asia. For queries regarding the research methodology, please contact Roger Chung or Shuting Guo. For queries regarding the contents of the report, please contact Gary Wu, Taylor Lam or Lisa Zhou.