Asia’s neobanking sector is undergoing rapid transformation, with digital-only banks scaling across key markets and reaching millions of users. The trend is driving financial inclusion and attracting strong investment, but regulators are tightening oversight as competition with traditional banks grows.
Expansion across the region
The Asia–Pacific region now hosts more than 100 neobanks, with most countries licensing at least two challengers. China’s WeBank, South Korea’s KakaoBank and Singapore’s GXS Bank have established themselves as leaders, offering fully digital services that appeal to younger, mobile-first customers.
In Southeast Asia, adoption is accelerating. Analysts forecast the number of neobank users in the region will rise from 2.6 million in 2024 to more than 22 million by 2028. This reflects both rising smartphone penetration and consumer demand for faster, cheaper financial services.
Financial inclusion is a key driver
Neobanks are gaining traction in countries with large underbanked populations. In India, around 80% of the population remains underserved by traditional banks, creating fertile ground for digital players. In the Philippines, Tonik became the country’s first fully licensed neobank in 2021 and quickly secured significant deposits, highlighting the appetite for digital-only services.
These banks appeal to customers who lack access to conventional branches, offering simple account opening, low fees and 24-hour digital access.
Investor appetite remains strong
Capital is flowing into the sector as investors bet on long-term structural growth. Venture capital firms are backing neobanks that focus on payments, lending and wealth management. Although digital banks still represent a small share of total banking assets, they already serve hundreds of millions of people worldwide, underlining their disruptive potential.
The challenge is turning rapid customer growth into sustainable profitability, a hurdle many neobanks continue to face.
Regulation tightens
Authorities across Asia are stepping up supervision as digital banking expands. Singapore has promoted innovation through regulatory sandboxes that encourage new entrants to test products under oversight. China’s clampdown on fintech in recent years shows how quickly regulatory priorities can shift. Across the region, requirements on data protection, cybersecurity and capital adequacy are being strengthened to ensure stability.
Outlook for the sector
The growth of neobanks signals a structural change in Asia’s financial landscape. They are increasing competition, improving inclusion and reshaping customer expectations. Their future success will depend on balancing innovation with compliance, expanding responsibly and achieving profitability.
For consumers, the rise of neobanks promises greater choice and more accessible services. For regulators and investors, it raises questions about stability, governance and the sustainability of growth.
Newshub Editorial, 10 September 2025
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