Though North America has historically been the world’s leader in technology adoption, Asia-Pacific (APAC) is rapidly closing the gap, especially when it comes to generative artificial intelligence (AI).
A 2024 survey by Boston Consulting Group (BCG), which polled 240 senior executives from eight industries across China, India, Southeast Asia, Northeast Asia, and Australia and New Zealand, found that in both North America and APAC, 16% of organizations are already realizing tangible value in genAI, suggesting that the technology has been in use for some time and delivering measurable impact.
Though APAC matches North America in value realization, the region is outpacing other regions in investment. In 2023, APAC organizations invested 7.6% of their annual revenue in digital and genAI, the highest among all the regions studied and ahead of North American at 7.1% and the European Union (EU) at 4.3%.
In addition to financial investment, APAC firms are also dedicating more human capital to genAI. On average, 8.3% of full-time equivalents (FTEs) are engaged in digital and genAI work across APAC organizations, compared to 6.1% in North America and 4.6% in the EU.
Within APAC, companies are planning long-term transformation. More than 90% of the organizations polled in the region are looking to scale up genAI over two years, and over half of them will work with partners to expand their AI capabilities.
However, this trend differs in the financial services sector. In this industry, only 38% of respondents are pursuing partnerships. On the other hand, 28% are choosing to build their own solution, the highest proportion across all the sectors studies. This underscores the sector’s heightened sensitivity to data security and compliance concerns.
China and India lead genAI adoption in APAC
In APAC, China and India are at the forefront of genAI adoption, with 75% and 73% of surveyed organizations respectively reporting genAI implementation. Both locations benefit from thriving tech ecosystems, large talent pools and strong government support.
China is home to a number of AI leaders, among which DeepSeek. DeepSeek is an AI research organization known for developing powerful open-source large language models (LLMs) known for their performance, accessibility and low operational costs.
India, meanwhile, is a global IT hub with a vast talent pool of skilled tech professionals. As of fiscal year 2021, India was home to 3.8 million tech professionals. Each year, it produces 2.14 million STEM (science, technology, engineering and mathematics) graduates annually, according to the National Association of Software and Service Companies (NASSCOM).
China and India also boast supportive governments that have introduced conducive initiatives. The Chinese government is driving AI innovation via policies such as the Next Generation AI Development Plan, which aims to make the country the world’s leading AI innovation center by 2030. In India, government programs like Digital India are establishing modern public services, accelerating AI adoption.
Southeast Asia lags despite efforts
Southeast Asia trails behind with a genAI adoption rate of 65%. Vietnam, the Philippines and Laos, in particular, are emerging as relative laggards.
Despite this, the region’s financial services industry is increasingly embracing genAI. Chatbots are proliferating, leveraged by the likes of Great Eastern Life, Tonik, DBS and OCBC to improve customer engagement, reduce errors, and assist employees in drafting investment reports and translating content.
GenAI is also addressing longstanding challenges in credit scoring, including biases, discrimination and a lack of historical data. By synthesizing vast datasets from diverse sources, the technology provides a more inclusive and accurate assessment of creditworthiness, especially for gig economy workers and individuals with non-traditional employment.
Singapore-based FinbotsAI exemplifies how GenAI is transforming credit scoring. The startup has developed CreditX, an AI-powered platform that helps clients more accurately assess applicants’ creditworthiness for a wide variety of lending use cases, including small and medium-sized enterprise (SME) loans, credit cards, and personal and home loans. CreditX has been adopted by leading banks in Southeast Asia, such as Sathapana Bank in Cambodia and KBZ Bank in Myanmar, as well as digital lending fintech startups.
Top industries adopting genAI in APAC
Looking at the industries at the forefront of genAI adoption in APAC, the study found that the technology, media and telecom (TMT) sector and the consumer sector are frontrunners, with adoption rates of 81% and 74%, respectively.
In these sectors, genAI offers a way to enhance customer relationships through personalized engagement and customer behavior analysis. These industries generate huge amount of data, fueling AI-driven innovation.
These sectors are also hot on tech. TMT is a tech-driven sector which offers robust infrastructure and expertise to integrate genAI seamlessly into operating processes. In the consumer sector, advanced digital transformation in e-commerce is creating a solid foundation for genAI adoption.
After TMT and consumer, insurance and financial institutions are following closely behind, with adoption rates of 72% and 68%, respectively.
In the banking sector, the McKinsey Global Institute (MGI) estimates that genAI could add between US$200 billion and US$340 billion in value annually, or 2.8% to 4.7% of total industry revenues, largely through increased productivity.
Featured image credit: edited from freepik
