Experts within the banking & finance sector have spoken, and this is what they have to say about the much-anticipated ASEAN Economic Community integration (AEC).
Cambodia — together with Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Laos, Myanmar and Vietnam — officially joined the AEC with the coming of the new year, ushering in a new era for the Asian block. As one of the three pillars of ASEAN, AEC seeks to fulfill the vision of a region in which there is a free flow of goods, services and investment, and equitable economic development that slashes poverty and socio-economic disparities.
Matthew Tippetts, managing partner at M Invest thinks that “the impact should be positive,” arguing that “it will support FDI and economic development.” Tippets also believes AEC integration will support the development of Cambodia’s fledging banking industry: “As the market grows, not only corporate demand for banking and finance services will increase. Individual consumers will also demand this services as the Cambodian middle class expands.”
Sokleng Hong, head of corporate banking at Canadia Bank, shares Tippetts’s enthusiasm when it comes to the foreseeable repercussions of AEC integration.
“ASEAN integration is expected to significantly boost investments, job creation, and incomes in the region. This will spur increased competition and innovation, and increase demand for quality products and services. lt is increasingly crucial to develop financial products and services that are relevant to customers’ needs. Banks will need to adapt to a new landscape. ASEAN integration will increase cooperation with respect to human resource development and capacity development, financial policy formulation, integrating industries across national boundaries, regional sourcing, and enhance private sector involvement in building the economic community.”
We asked Sokleng how Canadia Bank is preparing for AEC membership. He emphasises the importance of striving to deliver the highest possible level of quality, being flexible and listening to customers’ needs.
“While Canadia Bank is certainly taking AEC integration seriously, our focus is on being the best and safest bank in Cambodia. This guides and informs how we develop and execute our strategy, and where and how we mobilize resources. We believe that in order to do so means that our focus needs to be on strength, stability, reliability and trust. Our customers know that we will always do the right thing, especially in the context of the long-term. We know our customers and their needs, and for twenty four years we have made their needs our priority.
For us to adapt and remain responsive to market needs, Canadia Bank continues on its successful path of transformation. Nurturing collaborative teamwork in a performance-driven team of professionals is critical to ensure long-term sustainability of the Bank. The demands that we place on our team require strong senior leadership and expertise to lead, which helps ensure that internal changes are implemented successfully.”
Thierry Tea, managing partner of AGAMA Investments — the local affiliate of Singapore based investment house Starline Global Industries — is more cautious about the imminent economic integration: “I don’t think it would change too much. There would be improvement [when it comes to doing business in the region], but it will not happen overnight,” he says.
As AEC sets foot in the region and is fully assimilated by the member countries, Tea thinks, there will be “facilitation of business”, which, in turn, will engender economic growth across the region. However, he warns, each country will retain its own idiosyncrasies: “It’s like in Europe. You have the European Union, which has made a lot of things easier. However, you go to Spain, and doing business there is not the same as doing business in France or Italy. You still have to adapt to local specificities. Same will happen here,” he asserts.
Ultimately, Tea does believe a more robust economy and a “stronger business environment” in Cambodia and across the region will surface from AEC integration: “Increased competition will up the game when it comes to the way business is done. Cambodians will have to work hard to keep up to pace. Companies will strive to catch up, and standards will level up across the board,” he concludes.