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, on the spot 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, carried out between December 2024 and Could 2025, polled greater than 2,400 respondents throughout six of Southeast Asia’s greatest nations to determine the foremost traits remodeling how companies, entrepreneurs, and shoppers create and alternate worth throughout the area.

Embedded finance turns into mainstream

The analysis highlights a number of traits shaping the way forward for the area’s digital economic system, emphasizing the surge of embedded finance, with demand persevering with to develop.

In line with 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 enchantment of those capabilities. Moreover, 75% see embedded finance as “crucial” or “helpful”, underscoring its comfort, and alignment with present shopper expectations.

Customers additionally recognized embedded finance merchandise as crucial 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 wish to see BNPL extra usually when making purchases and 48% wish to see on the spot loans.

Wanting extra carefully on the profile of BNPL adopters in Southeast Asia, the research discovered that, opposite to traditional assumptions, BNPL customers are usually higher-income people quite than lower-income, financially underserved demographics searching for various sources of credit score.

In reality, 61% of BNPL customers are within the prime two revenue quartiles. Furthermore, these individuals are inclined to rank significantly increased than the typical for bank card possession, at 69% versus 45%. They’re additionally far more digitally-savvy, with 75% utilizing digital platforms to make transactions day by day.

These findings recommend that higher-income, digitally assured shoppers are driving BNPL progress in Southeast Asia, leveraging these options as a strategy to optimize spending and prolong buying energy. This factors to important progress potential throughout discretionary and premium classes, similar to luxurious items, high-end electronics, journey, and way of life companies.

A fertile floor for agentic commerce

AI is one other key pattern highlighted within the report, with speedy advances within the know-how paving the way in which for agentic commerce. Agentic commerce refers to the usage of autonomous AI brokers that may act on behalf of shoppers or companies. These AI brokers can discover, evaluate, and probably make purchases for patrons based mostly on their wants and preferences, aiming to boost 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 reality, 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 getting ready companies to undertake autonomous AI methods. In Singapore, for instance, the Cyber Safety Company of Singapore (CSA) launched in October Securing Agentic AI: an Addendum to the Pointers and Companion Information on Securing Synthetic Intelligence (AI) Programs, offering sensible steering for system house owners to safe agentic AI methods.

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 appearance 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 circumstances similar to quantity, service provider kind, and fee methodology.

AI-personalization as a brand new normal

In Southeast Asia, AI personalization has grow to be frequent observe. This pattern, which first emerged in e-commerce, has since expanded into finance. In the present day, 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 take into account switching to a financial institution or fee supplier that provides extra customized companies.

Respondents recognized budgeting intelligence (53%) as probably 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, on the spot funds have grow to be ubiquitous, pushed by fee modernization efforts and sooner 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 business vertical stay underserved. Throughout the area, 32% of shoppers reported experiencing gradual processing occasions and 42% of enterprise house owners reported gradual funds as a problem of their enterprise. That determine is even increased 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 probably the most under-performing verticals for fast-payments.

Actual-time cross-border funds take middle stage

One other key pattern highlighted within the HSBC, Google Cloud, and PCMI report is the elevated give attention to delivering on the spot cross-border funds. On this subject, two main developments are emphasised: Challenge Nexus, and the proliferation of stablecoins.

Challenge Nexus, led by the Financial institution for Worldwide Settlements, focuses on linking home on the spot fee methods throughout nations for sooner and lower-cost cross-border funds. Indonesia, Malaysia, the Philippines, Singapore, Thailand, and the Eurosystem, are amongst these a part of the initiative.

In line with the report, the implications for Challenge Nexus are huge. For e-commerce platforms and retailers, the know-how is poised to increase the dimensions of their addressable market by growing the usage of QR code funds and cell 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 Challenge 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 presently working on legislative amendments to formalize the framework.

This readability has prompted world gamers like Circle and Ripple to increase operations in Singapore to help enterprise use instances, illustrating that the area is well-positioned for institutional adoption.

Featured picture: Edited by Fintech Information Singapore, based mostly on picture by pikisuperstar by way of Freepik