The world today has shifted from an emphasis on globalization and "integration" to a state of "fragmentation" marked by deglobalization. Long-standing geopolitical tensions and pressures have gradually pushed countries toward regionalism. This structural shift signals a key trend: the global financial industry will become increasingly regional in the future. Asia, with its vast scale and the complex internal structures and institutional ecosystems of its countries, now stands at the forefront of this financial transformation.
A senior researcher at ANBOUND believes that on this basis, it is necessary to further divide Asia into four regions: East Asia, Southeast Asia, South Asia, and Central Asia (note: the Middle East and Russia's Far East are not considered part of traditional Asia and are therefore excluded). Each of these regions should be systematically analyzed in terms of their potential and competitiveness in the financial industry.
By examining the latest data and trends, it becomes clear that Asia's financial landscape is evolving into a structure dominated by East Asia, with Southeast Asia and South Asia serving as secondary centers, and Central Asia acting as a bridging hub. This emerging map not only reflects differences in financial maturity and institutional innovation across the regions, but also offers important strategic insights for China's regional financial cooperation.
East Asia possesses the most mature regulatory systems and capital markets in Asia. According to statistics, by 2024, the number of listed companies in Asia had reached nearly 29,000, accounting for 27% of global market capitalization, with nearly 60% of them located in East Asia. The region also leads in fintech and green finance. A prime example is the rapid development of China’s Cross-Border Interbank Payment System (CIPS). According to the latest data, CIPS has extended its settlement services to 187 countries and regions worldwide, with the number of participating banks surpassing 4,900, a record high. In the field of green finance, China has established a comprehensive green bond standard system. In 2024 alone, a total of RMB 681.433 billion in various types of green bonds were issued domestically. At the same time, newly released standards such as the Specifications for Green Bond Environmental Benefit Information Disclosure Indicators are helping to improve international green finance rules and support China’s role in shaping a new international financial order.
Japan and South Korea, both strong players in the global financial industry, naturally possess significant potential and competitiveness. However, both countries are also facing powerful shocks brought on by demographic shifts. In response to this challenge, their innovative practices in the field of retirement finance have demonstrated strong adaptability and growth potential. Japan’s Government Pension Investment Fund (GPIF) and South Korea’s National Pension Service have adopted distinct investment approaches, achieving a high degree of professional management. Both have also made significant strides in the digitalization of retirement finance, establishing precise disbursement management systems and comprehensive statistical and regulatory frameworks. In fact, they even play critical roles in their respective countries’ monetary defense strategies.
Southeast Asia, as the second-tier sub-center of Asia, is emerging as a pivotal hub for regional capital and institutional development. Singapore, in particular, has long maintained a neutral position among U.S. dollar, Chinese yuan, and euro assets. With its highly developed financial system and regulatory framework, it has become a key destination for global capital and a preferred location for establishing regional headquarters. Meanwhile, countries like Vietnam, Indonesia, and Thailand are experiencing rising domestic financing demand driven by manufacturing shifts and the growth of their middle classes, prompting the evolution of local financial systems. Regional financial mechanisms are also gradually strengthening the financial platforms of these nations. However, significant differences in institutional structures and varying levels of macroeconomic stability among Southeast Asian countries present ongoing challenges to regional integration. Additionally, telecom fraud has become a major risk in the region, not only damaging Southeast Asia's reputation, but also posing a threat to financial stability and security across the broader region, including East Asia.
It is worth noting that stablecoins are experiencing rapid growth in Southeast Asia. On the practical level, their usage in remittance services and e-wallet systems across the region continues to rise. Successful cases like the Philippines' Coins.ph demonstrate the strong vitality of digital payment tools in this market. These innovations not only reduce cross-border payment costs and improve access to financial services, but more importantly, offer new financial solutions for populations traditionally underserved by conventional financial systems. As regulatory frameworks gradually improve and technological infrastructure continues to advance, Southeast Asia has the potential to become a major driver of global digital finance development.
The financial sector in South Asia, also part of the second-tier group, is primarily centered around India. As one of the fastest-growing large economies in the world, India has achieved major breakthroughs in fintech, payment systems, and digital identity infrastructure. Its Unified Payments Interface (UPI) system now processes tens of billions of transactions monthly and serves over 400 million users, while the Aadhaar digital identity system provides unified digital identification for 1.2 billion people. Together, these systems form the world’s largest digital financial infrastructure. Notably, India has been reaching out to neighboring countries to integrate them into a budding digital payment network centered around itself. Meanwhile, other South Asian nations are also actively seeking their own paths to financial innovation. For instance, Bangladesh is working to cultivate its domestic capital market through instruments like green bonds; Sri Lanka, having experienced a severe debt crisis, is collaborating with the International Monetary Fund (IMF) to build a more modern financial governance system; and Pakistan has made significant progress in issuing digital banking licenses and promoting mobile payments, with its young population providing a strong foundation for fintech adoption. However, compared to India, these countries remain constrained by structural issues such as smaller market sizes and less transparent institutions.
Lastly, there is the region of the five Central Asian countries. From a geo-economic perspective, Central Asia’s unique geographic location gives it a foundational role as a “bridge” and “corridor” for financial exchanges between Europe and Asia. This bridging role is reflected not only in capital flows, but also in institutional alignment and standards integration. Kazakhstan’s Astana International Financial Centre (AIFC), for example, has adopted a legal framework based on common law, providing a mutually recognized legal structure for both Eastern and Western capital. Meanwhile, Central Asian countries' efforts in green finance are creating new opportunities for sustainable development financing in the region. Although the overall market size in Central Asia is limited and institutional stability remains a challenge, and while the development of centralized financial hubs will take time, the region’s potential as a Eurasian financial nexus is becoming increasingly evident. In particular, as China’s Belt and Road Initiative advances, Central Asia’s financial development is showing signs of deep integration with participating countries. For China's development strategy on its western region, the growth of Central Asia’s financial systems holds significant strategic value. The region’s financial environment could become an important financing channel and cooperation platform, enabling China’s western regions to better integrate into global industrial and value chains, and achieve high-quality development.
The formation of Asia’s regional financial landscape is the result of the natural evolution of diverse institutional logics and development paths. In the coming era of deglobalization, increasingly shaped by regionalism, the key to the next stage of financial competition will lie in who can establish institutional paradigms within the region, who can gain pricing power over mobile capital, and who can take the lead in setting cross-regional financial rules. Looking at the current situation, a clear structure has already taken shape in Asia where East Asia leads the way, followed by South Asia and Southeast Asia, with Central Asia emerging as a new bridging hub.
Final analysis conclusion:
Asia's financial industry is evolving into a tiered structure led by East Asia, with Southeast Asia and South Asia as secondary centers, and Central Asia serving as a bridging hub. This structure reflects not only the differences in financial maturity and institutional innovation across regions, but also offers important strategic insights for countries’ regional financial cooperation.
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Zhijiang Zhao is a Research Fellow for Geopolitical Strategy programme at ANBOUND, an independent think tank.
