Digital Banks - Asia

Asia

In Asia, the Digital Banks market market is expected to witness a significant increase in Net Interest Income.
By 2024, it is projected to reach a staggering US$1.07tn.
This indicates the growing importance and potential of the Digital Banks market segment in the region.
Furthermore, the Net Interest Income is forecasted to exhibit a strong annual growth rate (CAGR 2024-2028) of 12.27%.
This steady growth is expected to propel the market volume to reach US$1.70tn by the year 2028, further solidifying Asia's position as a key player in the Digital Banks market industry.
When comparing the global market, it is notable that in China is projected to generate the highest Net Interest Income.
In 2024 alone, in China is expected to generate a substantial amount of US$969,200.0m.
This highlights the dominant position of the United States in the global Digital Banks market market.
Overall, the Digital Banks market market in Asia is poised for remarkable growth, with Net Interest Income projected to soar in the coming years.
As the region continues to embrace digital banking solutions, it is expected to play a pivotal role in shaping the future of the industry.
In China, digital banks are rapidly growing in popularity, with millions of users embracing the convenience and efficiency of online banking services.

Key regions: United Kingdom, Japan, China, United States, Brazil

Definition:

Digital Banks refer to the emerging market for purely digital banks that offer financial services via online and mobile platforms. Unlike traditional banks, digital banks also known as neobanks, do not have store-based branches and instead rely on technology to deliver their services. But in contrast to digital-only direct banks, which focus on providing traditional banking services in an online format, the digital banks/neobanks covered in this analysis prioritize cutting-edge features and a modern user experience.
Digital Banks offer a wide range of financial products and services, including savings and checking accounts, credit cards, personal loans, and investment products, among others. They aim to provide a more convenient, accessible, and user-friendly banking experience by leveraging technology such as mobile apps and artificial intelligence. They also provide a digital identification and onboarding process, often via smartphone.
The Digital Banks market is growing rapidly as consumers increasingly demand more convenient, digitally focused financial services. Neobanks/Digital Banks are able to offer these services at a lower cost compared to traditional banks, as they have lower overhead costs and a more efficient operating model.
However, digital banks face challenges in building trust and establishing their reputation in the financial services industry. They must also navigate the complex regulatory landscape and comply with the same rules and standards as traditional banks.
Overall, the Digital Banks market represents a growing and exciting opportunity for financial services providers to deliver innovative and convenient solutions to consumers.

Structure:

The market data comprises Net Interest Income, the value of Deposits, the value of Loans, Credit Card Interest Income as well as the number of ATMs.

Additional information:

The Banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. Banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Additionally, changes in regulations and the growing trend toward digitalization are shaping the retail and commercial banking market, creating opportunities for new entrants and forcing existing players to adapt.

Key players in this market are companies such as Bunq, Tomorrow, and Revolut.

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Market

Region

Region comparison

Currency

Analyst Opinion

Over the past few years, the Digital Banks market in Asia has experienced significant growth and transformation, reshaping the traditional banking landscape in the region.

Customer preferences: Customers in Asia are increasingly drawn to the convenience and accessibility offered by digital banks. The younger tech-savvy population, who are comfortable with online transactions, prefer the seamless digital experience provided by these banks. Additionally, the rising middle class in many Asian countries is driving the demand for more inclusive and affordable banking services, which digital banks are well-positioned to provide.

Trends in the market: In Singapore, for example, the digital banking sector has been thriving due to the government's support for innovation and fintech development. Digital banks in Singapore are leveraging advanced technologies such as artificial intelligence and blockchain to offer personalized services and enhance cybersecurity measures. This trend is also observed in other Asian countries like India and China, where digital banks are rapidly gaining traction among the tech-savvy population.

Local special circumstances: In countries like India and Indonesia, where a large portion of the population remains unbanked or underbanked, digital banks are playing a crucial role in financial inclusion. These banks are reaching remote areas through mobile banking services, providing a platform for individuals and small businesses to access banking services that were previously out of reach. Moreover, in markets like South Korea and Japan, where the aging population is growing, digital banks are catering to the evolving needs of older customers by offering user-friendly interfaces and tailored financial products.

Underlying macroeconomic factors: The growing smartphone penetration and internet connectivity across Asia are key drivers of the digital banking market. As more people gain access to mobile devices and the internet, the potential customer base for digital banks expands. Furthermore, the regulatory environment in many Asian countries is becoming more conducive to digital banking, with regulators introducing frameworks to support innovation while ensuring financial stability. These factors, combined with the changing demographics and increasing demand for convenient banking services, are fueling the growth of the digital banks market in Asia.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data provided by the IMF, World Bank and the annual reports of the top 1000 Banks by asset size. Next we use relevant key market indicators and data from country-specific associations such as GDP, deposit interest rates, lending interest rates or bank account penetration rates. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, the S-curve function and exponential trend smoothing are well suited to forecast financial services for digital as well as traditional products and services.

Additional Notes:

The market is updated twice per year in case market dynamics change.