Five years ago, digital banking was one of the most talked-about developments, especially within the financial sector across Asia.

New licences were being issued across Singapore, Malaysia, the Philippines, Hong Kong, and beyond. Regulators spoke about innovation and inclusion. Founders spoke about disruption. Investors spoke about scale.

To sum up as a whole, the picture looks far more nuanced.

Some digital banks have found their footing and are scaling steadily. Others are facing struggles, with some unlucky ones having pivoted and even quietly faded from the spotlight.

Looking at this current state of what’s happening around these digital banks, it was to no surprise that the talk of the town, five years ago, was whether or not traditional banks would become casualties in this relatively “new” era.

Fast forward to today, and the predicted victims, surprisingly, are still very much in the game.

In many cases, they have adapted faster than expected.

That reality is something David Becker, Managing Director for Asia Pacific at Mambu, has had a front-row seat to.

As a core banking technology provider working with both new digital banks and incumbents across the region, David has watched the digital banking story unfold from behind the scenes.

In hindsight, one thing in particular stood out to him.

“I expected the new players would disrupt the old,” David said. “But actually it’s been more balanced across the region.”

That balance, and what it reveals about the future of banking in Asia, is at the heart of where the industry finds itself today.

The Incumbents Were Never as Immobile as They Seemed

In the early days of Asia’s digital banking push, the narrative was well, far simple.

The hypothesis was the new, cloud-native digital banks would move faster, operate cheaper, and win over customers that traditional banks could not reach.

Incumbents, on the other hand would be burdened by legacy systems and organisational inertia, and would struggle to keep up.

That story turned out to be an incomplete speculation.

What surprised David most was not just how quickly digital banks launched, but how rapidly traditional banks responded to it.

Across the region, incumbents began modernising their technology stacks, forming partnerships, investing in fintechs, and to some extent, even launching digital subsidiaries of their own.

Instead of a clean disruption story, what emerged was a more competitive and collaborative ecosystem.

Banks that once would have seen each other purely as rivals began working together, recognising that the market opportunity was large enough to support multiple approaches.

This could all be due to how the unbanked and underbanked populations across Southeast Asia which still remain at vast, particularly in countries like Indonesia, the Philippines, and Vietnam.

For many banks, the realisation was that collaboration could accelerate access to those markets far more effectively than going at it alone.

Five years ago, we would think that partnerships between large banks and fintech platforms would have seemed unlikely.

Today, they are becoming more of a routine.

The First Wave Chased the Wrong Customers

If incumbents adapted faster than expected, digital banks themselves also learned some hard lessons.

In the early stages, many digital banks across Asia focused on the same customer profile. They would aim for the urban, tech-savvy, higher-income users who were already relatively well served by existing financial institutions.

The logic was understandable. These customers were easier to acquire digitally, more comfortable with mobile-first experiences, and more likely to try something new.

The problem however, was that this segment quickly became crowded.

“When most digital banks first set up, they were going after the urban, savvy, higher-income bracket,” David observed. “But now the growth has been driven by new deliveries of credit.”

Real traction, it turned out, came not from flashy user interfaces or lifestyle perks, but from solving more fundamental financial needs. Things that have always been an issue that was often overlooked.

Credit access, microfinancing, buy now pay later services, e-wallets, and SME funding began to drive both usage and revenue.

In many cases, growth came from customers who had previously been underserved or excluded entirely.

In plain English, mid-to-lower income segments, gig workers, rural populations, and small businesses quickly became the real engines of expansion.

Inclusion, that was once framed as a social goal, now have started to make commercial sense.

Infrastructure Matters More Than Branding

As competition intensified, the gap between digital banks that scaled and those that struggled became more apparent. According to David Becker, the difference often had little to do with marketing or brand awareness.

Instead, it came down to infrastructure.

“The investment you need to make is not just in the front end,” he said. “It’s in the back end. It’s crucial that it can sustain and scale with growth.”

Many banks underestimated the complexity of building a digital bank that could handle rapid growth, evolving regulatory requirements, and new product launches.

Some to an extend, even treated digital banking as an incremental extension of their existing business, rather than a fundamentally new operation.

The more successful players, well, they approached it differently.

They built new applications, new infrastructure, and new operating models from the ground up.

Cloud-native systems, modular architectures, and API-driven platforms gave them the flexibility to adapt quickly as market conditions changed.

There is however, an important distinction here that David often emphasises.

Cloud-native according to him, is not the same as cloud-hosted.

The former is designed specifically for cloud environments, allowing banks to deploy microservices, scale dynamically, and launch new products faster.

The latter is often little more than a lift-and-shift of legacy systems, with many of the same constraints still intact.

As customer expectations rose and competition intensified, the distinction has became increasingly important.

Speed Became a Strategic Weapon

In Asia’s fast-moving financial markets, speed to market is no longer a nice-to-have.

Financial institutions must know that now, it is a strategic necessity.

“What is good today could be very different three months from now,” David noted.

Regulatory changes, competitive launches, shifts in consumer behaviour, and macroeconomic pressures can quickly alter the landscape.

Digital banks that took years to go live often found themselves launching into a market that no longer looked the way it did when they started building.

The ability to launch in months rather than years became a decisive advantage as it allowed banks to test products, respond to regulatory guidance, and adjust credit strategies before conditions shifted again.

That need for speed also reshaped expectations around customer onboarding.

Digital banks have helped reset what consumers considered acceptable.

“[When] you order food and expect it to be delivered within an hour. [So], when you open a bank account, I want the same,” David pointed out.

As transport, food, and other daily services became on-demand, the friction built into traditional banking began to feel increasingly out of place.

When Inclusion Becomes Tangible

Perhaps the most compelling part of David’s perspective comes when the conversation turns to real-world impact.

In countries like Indonesia and the Philippines, digital banking has begun to reach customers far beyond urban centres.

Access to credit in rural areas, often delivered through mobile-first platforms, has enabled tangible improvements in daily life.

“All of a sudden, they [Mambu’s clients] are providing credit to rural areas of Indonesia and the Philippines,” Becker said.

This has all led to the improvement of its users’ wellbeing and access.

Sometimes, the impact is deceptively simple.

“It could be something as simple as buying a motorbike,” he added. “But it makes a huge difference.”

That motorbike can mean access to work, the ability to transport goods, or the freedom to travel between communities.

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Microfinance initiatives, including those led by NGOs, have also begun using digital banking infrastructure to reach populations previously locked out of formal financial systems.

Beyond individuals, fintech has also contributed to job creation and new economic activity. Platforms supporting ride-hailing, delivery services, and gig work have relied heavily on digital financial services to function at scale.

These are not abstract benefits but rather are visible, measurable changes in how economies operate.

The Next Generation of Digital Banks

Looking ahead, David believes that the next phase of digital banking in Asia will be shaped less by novelty and more by depth.

“I think it’s going to be more and more about inclusion … where you can scale, where you can look to grow and build on access to services that were not available before,” Becker highlighted.

Product diversity will matter.

Islamic banking, for example, continues to grow in importance across markets like Indonesia and Malaysia, while ESG-linked financial products are seeing rising demand.

Digital platforms make it easier to offer these specialised services at scale, something that was far more difficult in the past.

Regulators, too, are playing a crucial role.

Across Asia, regulatory frameworks have largely supported innovation while maintaining oversight. New licences continue to be issued in markets like Thailand and the Philippines, often backed by consortiums that combine banking, technology, and telecommunications expertise.

Competition will only intensify as every player wants to be at the centre of the region’s digital financial future. But the rules of the game are clearer now than they were five years ago.

Digital banking is no longer about proving that it can exist. It is about proving that it can endure, scale responsibly, and serve customers who were previously left out.

In that sense, Asia’s digital banking experiment is no longer an experiment at all. It is becoming part of the financial mainstream.

If you’d like to hear more from David Becker and see the conversation unfold in full, you can watch the complete interview in the video below.