Are digital first banks in Asia poised to lead a disruptive charge against well-entrenched, established commercial banks?
In the traditional banking sphere globally, but especially true in Asia, there is a considerable proportion of unbanked and underbanked populations who lack complete or any access to banking services. This is particularly prevalent in developing markets, while in more mature markets, commercial banks often fall short in delivering a personalised and streamlined digital experience to their customers, leading to customer dissatisfaction.
Moreover, small and medium enterprises (SMEs) which make up the bulk of businesses in the region, face numerous hurdles in their banking journey. These include a slow and paper-intensive account setup process, drawn-out loan application procedures with extensive documentation needs, as well as burdensome annual account reviews. Most critically, the vast majority of individuals feel that micro, small and medium enterprises (MSMEs) within the region face a struggle to secure credit through the traditional banking system.
In an effort to mitigate these customer pain points and to cater to the evolving needs and growing digital inclination of customers, there has been a marked rise in the number of digital first banks appearing in the major markets in Asia, with over 40 having launched to date.
However, not all digital banks in Asia are created equal. For instance in most of the frontier digital bank markets in Southeast Asia, the central banks have taken steps to issue digital-specific bank licenses separate from those of commercial banks.
These include Malaysia, which issued five digital banking licenses in early 2022 after receiving 29 applications, including two Syariah-compliant digital bank licenses; Singapore issued four (two for digital wholesale banks and two for retail digital banks) licenses in 2020, plus allowing Standard Chartered and FairPrice Group’s Trust Bank to operate in the country; and eight licenses were distributed by Hong Kong during its digital banking push in 2019.
But in Indonesia, which represents one of the most significant opportunities for pure digital banks in Asia with 66% of its population of 270 million unbanked – but with a high internet penetration rate of more than 70% – the Indonesian Financial Services Authority’s (OJK’s) regulation is that a digital bank is subject to the same capital and licensing requirements as a conventional bank, with no dedicated digital banking license.
A digital bank in Indonesia is required to maintain a minimum paid-up capital of IDR10 trillion (US$670.8 million), a sum considerably larger than that required in Malaysia. In Malaysia, a digital bank is obligated to uphold a minimum capital fund of a mere RM100 million (US$21 million), excluding losses, over the initial three to five years. Following that period, this sum will increase to RM300 million.
Encouragingly, foreign shareholders are permitted to possess up to 99% of the bank’s ownership, pending the approval of OJK. Unlike certain other parts of Asia, digital banks in Indonesia can either be established either entirely from the ground up, or via the transformation of an existing traditional bank into a digital entity.
So for the purposes of this list, outside of Indonesia, only native digital banks in Asia that have been licensed by their respective central banks are being considered. Traditional incumbent banks in Asia that have set up standalone digital banks, separate from their virtual banking platforms, and are registered to operate as a digibank in their jurisdictions, are also featured.
The following is a list of (mostly) licensed, standalone digital banks known to be operating in major markets across Asia, or are due to begin operations in the near term.
Tencent, Baiyeyuan, Liye Group, and other companies founded its neobank called WeBank in 2014, and capitalised on Tencent’s vast app customer base to serve over 200 million customers and 1.3 million small and medium-sized enterprise (SME) clients. It also created proprietary advanced risk models that allows the neobank to approve loans in under 3 seconds. Quinlan and Associates lists WeBank among the most profitable digital banks in the world, not just Asia, and is the largest digital-only bank in China with total assets of US$69 billion.
Suning Bank is a private bank in China that is backed by Suning Commerce Group, a Chinese retail giant. It is also one of the first online-to-offline (O2O) banks in China, which means it provides both online and offline financial services to customers. Suning Bank received its banking license from the China Banking Regulatory Commission (CBRC) in December 2016, and commenced operations in June 2017 with registered capital of 4 billion yuan. It offers products such as deposits, loans, wealth management, payments and insurance to individual and corporate customers.
MYBank was founded in 2015 by Ant Financial, Shanghai Fosun Industrial Technology Development Co., Wanxiang Sannong Co., and Ningbo Jinrun Asset Management. MYBank is an online-only bank that focuses on serving SMEs as well as underbanked rural and urban customers, and is a major part of parent part of Alibaba Group’s e-commerce ecosystem. The bank uses analytics on real-time payments data and risk-management systems to analyse more than 3,000 variables when issuing loans.
XW Bank is the third bank in China to acquire a license to operate as a digital-only bank and is backed by New Hope Group and Xiaomi Corporation, the Chinese smartphone maker. It’s loan system automatically grants loans based on credit history analytics harnessing big data. The online-only bank offers products such as deposits, loans, wealth management, payments and insurance to individuals and small business customers.
AiBank is a joint venture of China’s Citic Bank and search engine operator Baidu, and is the first state-controlled digital bank in China. The Beijing-based virtual bank reportedly launched a three-dimensional digital banking outlet to increase user activity and acquire new customers. It also uses generative AI and digital human technologies to make banking products more accessible to consumers and small businesses. Originally providing online lending services, it has since branched out into payments, credit, and wealth management.
Sony Bank is one of the largest online banks in Japan and a subsidiary of Sony Financial Holdings, the financial business unit of the multinational conglomerate. Sony Bank operates as a direct digital bank and has no physical branches or ATMs, offering various services such as yen and foreign currency deposits, loans, investment trusts, foreign exchange and card services.
Jibun Bank is a licensed online bank jointly established by KDDI, a telecommunications company, and Mitsubishi UFJ Bank, one of the largest banks in Japan. Jibun Bank offers various services such as balance inquiries, transfers, time deposits, foreign currency deposits, loans, and even public lottery tickets.
Minna Bank is Japan’s first fully digital bank and was established by the Fukuoka Financial Group, a holding company with one of the largest regional banks in Japan. Minna Bank provides various services such as current and savings accounts, cash withdrawals and deposits via smartphone, a virtual debit card and account-to-account transfer. Minna Bank also aims to provide banking-as-a-service and embedded finance solutions for non-financial companies.
PayPay Bank is a subsidiary of SoftBank and Yahoo Japan and part of the PayPay Corporation, which provides a smartphone payment service likewise called PayPay. PayPay Bank offers various services such as deposits, loans, investment trusts, foreign exchange and card services. PayPay Bank also provides seamless integration with PayPay app, allowing users to access their bank accounts and make payments with one tap.
An online bank established in 2000 as E-Bank and subsequently rebranded as Rakuten Bank in 2010 as a subsidiary of Rakuten Group, Japan’s leader in internet services. Rakuten Bank offers various services such as deposits, loans, investment trusts, foreign exchange and card services, as well as providing integration with other Rakuten services. Rakuten Bank is the largest online bank in Japan by number of accounts, surpassing 11 million accounts in 2021.
SBI Sumishin Net Bank is a joint venture between SBI Holdings and Sumitomo Mitsui Trust Bank, and was established in 2007 as an internet-only bank. It is one of the leading internet banks in Japan, with over 8 trillion yen in deposits and a cumulative total of more than 9 trillion yen in mortgage loans. It also offers various financial services such as debit cards, investment trusts, FX, and neo-bank services. It became the country’s first digital lender to list on the Tokyo Stock Exchange in December 2022.
Seven Bank is a licensed online bank with no traditional branches in Japan, with most banking done through its app, although there are still a few locations where a bank account can be opened in person. Seven Bank offers various banking services such as deposits, loans, debit cards and domestic and international money transfers. As a subsidiary of Seven & I Holdings Co. Ltd., which operates 7-Eleven convenience stores, it also operates around 20,000 ATMs nationwide, with plans to introduce Japan’s first facial recognition ATM service by March 2024.
KakaoBank is a subsidiary of Kakao Corp., which operates the popular messaging app KakaoTalk, and was established in 2016, receiving its banking license in April 2017. It was the second digital bank in South Korea after K Bank, which had launched its services a few months earlier. It has become one of the most successful digital banks in Asia, with over 19.8 million active customers by the end of September 2022. It offers banking services including deposits, loans, debit cards, mortgage loans and neo-bank services. It also became the country’s first digital lender to list on the Korea Exchange in August 2021, raising about US$2.1 billion.
K Bank is the first licensed, digital-only bank in South Korea, a joint venture between KT Corporation, a telecommunications company, and other financial and IT companies. Receiving its banking license in November 2015, it had over 250,000 customers by April 2017. It offers a variety of banking services such as online banking, mobile banking, loan and deposit, debit card and overseas remittance. The bank also filed for an IPO on the Korea Exchange in June 2022.
Toss Bank received preliminary approval for a digital banking license from the Financial Services Commission of Korea in December 2019 and launched its services in September 2021, becoming the third digital bank in South Korea to operate without a physical branch. It has over 2.3 million users as of March 2022, offering various banking services such as deposits, loans, debit cards and international money transfers.Toss Bank was planning to raise funds at a valuation of US$3 billion in Q1 2023.
Airstar Bank is a joint venture between Xiaomi Corporation, a global IoT leader, and AMTD Group, a comprehensive financial services conglomerate. Airstar received its banking license from the Hong Kong Monetary Authority (HKMA) in May 2019. It officially launched its virtual banking services in June 2020, offering savings account, time deposit and personal loan products.
WeLab Bank is a subsidiary of WeLab Holdings, a fintech company that operates online lending platforms in Hong Kong, mainland China and Indonesia. WeLab received its banking license from the HKMA in April 2019, becoming the first homegrown startup to do so. It officially launched its virtual banking services in July 2020, offering deposit, loan, payment and wealth management products.
Livi BankLivi Bank is a joint venture between BOC Hong Kong Holdings, a banking and financial services company, and JD Digits, a digital technology company based in China. It received its banking license from the HKMA in March 2019, along with two other virtual banks. Livi Bank officially launched its virtual banking services in September 2020, offering deposit, loan, payment and insurance products.
Mox Bank is a licensed digital bank in Hong Kong. It is a joint venture between Standard Chartered Bank, a global banking and financial services company, and other partners including HKT, PCCW and Trip.com. Mox Bank was one of the two other virtual banks to receive its banking license from the HKMA in March 2019. It officially launched its virtual banking services in September 2020, offering deposit, loan, payment and wealth management products.
Ant Bank is a subsidiary of Chinese fintech and e-commerce giant Ant Group, and was one of the digital native lenders to obtain its banking license from the HKMA in May 2019, along with three other virtual banks. Like Livi Bank and Mox Bank, Ant officially launched its digital banking services in September 2020, offering deposit, loan and payment products.
Fusion Bank is a joint venture between ICBC (Asia), a banking and financial services company, and other partners such as Tencent, Hillhouse Capital along with Hong Kong Exchanges and Clearing. It received its banking license from the Hong Kong Monetary Authority in May 2019, and officially launched its virtual banking services in December 2020, offering deposit, loan, payment and foreign exchange products. It also secured Type 1 (dealing in securities) and Type 4 (advising on securities) licenses from the Securities and Futures Commission in November 2022, allowing it to expand into the wealth management space.
Ping An OneConnect Bank
PingAn OneConnect Bank is a subsidiary of OneConnect Financial Technology, a fintech and cloud platform service provider based in China. It is also a member of Ping An Insurance, a leading insurance and financial services group from the mainland. It received its banking license from the HKMA in mid-2019 along with three other virtual banks. It is developing diverse business segments including retail banking and SME banking in Hong Kong.
ZA Bank is a subsidiary of ZhongAn Technologies International Group Limited, a fintech and insurtech company based in China. It became the first fully-operating virtual bank in Hong Kong when it launched its services to the public in March 2020. It has over 500,000 users as of December 2021. It offers various banking services such as deposit, loan, transfer, payment, insurance and business banking. It also became the first virtual bank in Hong Kong to receive a Type 1 license from the Securities and Futures Commission for dealing in securities in January 2022.
Overseas Filipino Bank
Overseas Filipino Bank is a standalone, specialised digital bank created by the Philippine government to serve the needs of Filipino workers abroad and their families back home/. It is a subsidiary of the Land Bank of the Philippines, one of the largest state-owned banks in the Philippines. Overseas Filipino Bank is the country’s first-ever digital-only, branchless bank that allows clients to complete banking transactions at any time and across the globe.
UNObank is a subsidiary of DigibankASIA, a fintech company headquartered in Singapore. It received approval from the Bangko Sentral ng Pilipinas (BSP) to operate a digital bank in the Philippines in June 2021. UNObank offers various banking services such as savings, loans, transfers, investments and insurance.
Union Digital Bank
Union Digital Bank is a digital bank spinoff by Union Bank of the Philippines, a publicly-listed traditional bank. It received approval from the Bangko Sentral ng Pilipinas (BSP) to establish a digital bank in July 2021 and launched its digital banking services in 2022, acquiring 1.73 million customers in its first four months of operations. The wholly-owned subsidiary of Union Bank of the Philippines offers numerous banking services such as savings, loans, transfers, payments and investments.
GoTyme is a joint venture between the Gokongwei Group, a Philippine conglomerate, and Tyme, a Singapore-based digital banking group. It received its digital banking license in July 2021, as one of the six digital banks licensed by the BSP to operate in the country. It aims to drive financial access for all Filipinos by offering various banking services such as savings, loans, transfers, payments and rewards.
Tonik Digital Bank is a licensed digital bank in the Philippines. Tonik was issued an official digital bank license by the BSP in June 2021, becoming the first private neobank in the Philippines to do so. It also has deposits insured by the Philippine Deposit Insurance Corporation (PDIC).
Digital wallet PayMaya rebranded as Maya in 2022 and officially launched its digital bank Maya Bank, after receiving a digital banking license from the BSP in September 2021. It is the digital banking arm of Voyager Innovations, the leading technology firm in the Philippines. It also has deposits insured by the PDIC.
LINE Bank launched its digital banking platform in Indonesia in June 2021. It is a collaboration between LINE Financial Asia and PT Bank KEB Hana Indonesia, a subsidiary of South Korea’s Hana Bank. It is the third market that LINE Bank operates in, after Thailand and Taiwan.
According to the International Trade Administration, Jago is one of the seven currently licensed digital banks in Indonesia by the Financial Services Authority (OJK). It was formerly known as PT Bank Artos Indonesia Tbk and changed its name to PT Bank Jago Tbk in 2020. It also has a partnership with Gojek, through its payments and financial services arm Gopay.
Bank Aladin Syariah was formerly known as PT Bank Net Indonesia Syariah Tbk and changed its name in 2021. It is the first full digital bank in Indonesia that operates according to the principles of shariah. It is also registered and supervised by the Financial Services Authority (OJK) and a participant of the Deposit Insurance Corporation (LPS).
TMRW by UOB is a digital bank that offers a full suite of banking solutions through a smart, mobile-only app. It is a subsidiary of Bank UOB Indonesia and is one of the few pioneers of end-to-end digital banking services in Indonesia, as well as being ranked among the top 100 global digital banks.
SeaBank is a digital banking platform launched by PT Bank Seabank Indonesia, a subsidiary of Sea Limited, the Singapore-based technology company. SeaBank offers banking services including savings, deposits, transfers, bill payments, and linkage with QRIS, the Indonesian QR payment standard. Bank Seabank Indonesia was formerly known as PT Bank Kesejahteraan Ekonomi and changed its name in 2021 following the acquisition by Sea Limited.
Jenius is one of at least seven currently licensed digital banks in Indonesia by the Financial Services Authority (OJK) and a participant of the Deposit Insurance Corporation (LPS). It is a digital banking platform launched by PT Bank BTPN Tbk, one of the largest banks in Indonesia. It provides various features such as savings, transfers, bill payments, and QRIS.
Blu by BCA Digital
Blu by BCA Digital is a digital banking platform launched by BCA Digital, a subsidiary of Bank Central Asia (BCA), one of the largest banks in Indonesia. Blu provides various funding products and payment services tailored for digital-savvy millennial and Gen Z users. With over 552,100 registered customers and Rp 1.7 trillion collected in deposits, The Asian Banker named Blu by BCA Digital the Best Digital-Only Bank in Indonesia in 2022.
The former PT Bank Rakyat Indonesia Agroniaga Tbk was transformed into a digital bank in 2021 and was subsequently renamed PT Bank Raya Indonesia Tbk. Raya Bank is a subsidiary of BRI, the state-owned bank with the largest network in Indonesia, and was appointed as a ‘Digital Attacker’ to enter the digital banks space of the largest economy in Southeast Asia. According to its website, Raya is committed to improving digital infrastructure to support the empowerment and growth of gig economy workers in Indonesia. It is also registered and supervised by the OJK and is a participant of the LPS.
MotionBanking is a digital banking app that offers various features such as online account opening, cardless cash transactions, installment credit card, transfer and payment, top up and payment, voucher credit card and promotion. A product of PT Bank MNC Internasional Tbk (BABP) or MNC Bank, which is a private bank in Indonesia that is part of the MNC Group, MotionBanking claims to be a digital banking service that can meet all the digital transaction needs of users. It has since been confirmed by the Otoritas Jasa Keuangan (OJK) as a licensed digital bank in Indonesia.
Bank Neo Commerce is a bank that operates mainly through digital channels and offers various banking services such as savings, loans, payments and investments. PT Bank Yudha Bhakti was established in 1989 and controlled by Gozco Group and several cooperatives in the TNI environment before changing its name to PT Bank Neo Commerce Tbk in 2019 and transforming “its banking services into a digital retail bank” and launching its digital banking app called neobank or Neo+. It claims to be a digital bank that dares to be more profitable and offers high interest rates for its customers.
Bank Capital provides various banking services such as savings, loans, payments and investments. Originally established in 1989 as a joint venture between Credit Lyonnais SA and Bank Internasional Indonesia (now Bank Maybank Indonesia), in 2004 it was acquired by Danny Nugroho and changed its name to Bank Capital Indonesia and became a part of the Capital Financial Indonesia Group. In 2o21, Pt Bank Capital Indonesia changed its business strategy towards digital retail and MSME credit banking, offering exchange rate, capital deposit and mobile banking services. It is registered and supervised by the OJK and is a member of the LPS.
Digibank by DBS Indonesia is a digital banking service that allows users to open an account, make transactions, access loans and credit cards, and invest in various products using a mobile app. It is a product of Bank DBS Indonesia, which is a subsidiary of The Development Bank of Singapore Limited (DBS Group). It claims to be a paperless, branchless and signatureless banking service that uses e-KTP and fingerprint verification.
Trust Bank is backed by a unique partnership between Standard Chartered Bank and FairPrice Group, bringing together a leading international bank and a major food-focused social enterprise with more than 200 years of combined experience in Singapore. Trust Bank was officially launched on September 1, 2022 and offers a range of products for its customers, such as a credit card, a savings account and a family personal accident insurance.
GXS Bank holds a banking license issued by the Monetary Authority of Singapore (MAS). It is backed by a consortium consisting of Southeast Asia’s leading super app Grab Holdings and Singaporean telecommunications technology group Singtel. It is one of the four digital banks that were granted licences by MAS in late 2020.
Anext Bank is one of only two digital banks throughout Asia to be successful applicants to receive the digital wholesale banking license issued by the MAS in December 2020. It focuses on providing innovative and secure digital financial services to local and regional SMEs to aid their growth and global expansion. Anext is backed by China’s fintech giant Ant Group.
Maribank is a wholly owned subsidiary of Sea Limited, a Singapore-based technology company. Maribank received a digital full bank license from the Monetary Authority of Singapore (MAS) in December 2020, allowing it to directly take deposits on an invite-only basis and offer services locally to retail as well as corporate customers.
Green Link Digital Bank (GLDB) is the other of the two successful applicants to receive the digital wholesale banking licence issued by the Monetary Authority of Singapore (MAS) in December 2020. It officially commenced its banking business on June 3, 2022. GLDB is owned by a consortium headlined by Greenland Financial Holdings, a Chinese state-owned developer. It focuses on providing supply chain financing solutions to MSMEs.
Rakuten International Commercial Bank
Rakuten International Commercial Bank (RICB) is the first digital bank to launch in Taiwan. It was established in May 2020 and officially launched operations in January 2021. Backed by the Japanese e-commerce giant Rakuten, RICB offers deposits, fund transfer, small loan and debit card services with plans to expand into mortgages and corporate loans.
Next Bank received its operational license from Taiwan’s Financial Supervisory Commission (FSC) for launching an internet-only bank in February 2021 and commenced operations on March 29, 2021. Next Bank is backed by Chunghwa Telecom, Taiwan’s largest telecom operator, and aims to provide consumers with universal access to a wide range of financial services including deposits, cards, loans and a points program giving customers cashback on purchases, all accessible via a mobile app.
Line Bank received its operational license on February 4, 2021, and launched its online bank in the first half of 2021. Line Bank is affiliated to the same consortium of LINE Corporation based in Japan that operates the popular messaging and social media app. Line Bank offers services such as deposits, wire transfers, debit cards, along with personal credit loans and target customers who already use the LINE app.
Boost Holdings Sdn Bhd and RHB Banking Group
Boost and RHB are among the five successful applicants that have been granted a digital bank license by Bank Negara Malaysia (BNM) on April 29, 2022. Boost is the fintech arm of Axiata Group Berhad, a telecommunications company, and RHB is one of the largest banking groups in Malaysia. The consortium aims to deliver greater financial inclusion in Malaysia by offering affordable and accessible digital banking and financial solutions to consumers and businesses. Boost will own a 60% stake in the digital bank joint venture, whereas RHB will own the remaining 40%.
Sea Limited and YTL Digital Capital
Sea Limited and YTL Digital Capital are another of the five successful consortiums that were granted digital bank licenses by BNM in 2022. Singapore-based Sea Limited operates e-commerce platform Shopee, gaming platform Garena and digital financial services platform SeaMoney. YTL Digital Capital is a subsidiary of YTL Corporation Berhad, a Malaysian conglomerate with businesses in utilities, construction, property development and hospitality. The consortium aims to leverage Sea’s regional experience and YTL’s local presence to offer innovative and inclusive digital banking solutions to consumers and businesses in Malaysia.
GXS Bank Pte Ltd and Kuok Brothers Sdn Bhd
GXS Bank is a joint venture between Grab Holdings Limited and Singtel, two Singapore-based companies. Kuok Brothers is a Malaysian conglomerate with interests in various sectors such as agribusiness, property, hospitality and media. The consortium will leverage Grab’s and Singtel’s regional experience along with Kuok Brothers’ local presence to offer innovative and inclusive digital banking solutions to consumers and businesses in Malaysia. GXS Bank will hold a 55.45% stake in the proposed Malaysia digital bank, to be led by Lai Pei Si, a financial industry veteran with over 25 years of experience.
AEON Financial Service is a Japanese company that provides various financial services such as credit cards, loans and insurance in Asia. AEON Credit Service is its Malaysian subsidiary that offers non-bank financial services such as hire purchase, personal financing and credit cards. The consortium formerly included MoneyLion Inc, a US-based fintech company that provides digital banking, investment and personal finance solutions. The consortium has obtained approval for an Islamic digital banking license to offer Shariah-compliant products and services to its customers, aiming to leverage AEON’s experience in serving the low and middle-income segments. MoneyLion’s technology and data analytics capabilities were originally to play a part in the digibank’s formation, but Fintech News Malaysia has since exclusively revealed that MoneyLion had pulled out of the pact.
KAF Investment Bank is a Malaysian company that provides investment banking and Islamic financial services including in corporate finance, treasury, asset management and stockbroking. The KAF consortium which also includes notable names like Carsome, MoneyMatch and Jirnexu obtained approval for the second Islamic digital banking license, planning to leverage KAF’s experience in serving the retail and corporate segments as well as its network of ecosystem partners to offer innovative and inclusive digital banking solutions to consumers and businesses in the country.