Market Size of Asia-Pacific Neo Banking Industry
| Study Period | 2020 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2020 - 2022 |
| CAGR | 8.00 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Need a report that reflects how COVID-19 has impacted this market and its growth?
APAC Neo Banking Market Analysis
The covid-19 pandemic had a significant effect on the economies of the region, however, the growth of the neo-banking market in the region accelerated during and after the pandemic. The demand for the online banking offered by the Neo banks rose significantly during the pandemic when people were confined to their homes due to lockdown and other restrictions.
Aside from the pandemic's contribution, neobanks' product offerings can also be linked to user growth. They've positioned themselves to provide financial products that will assist customers in achieving short-term financial objectives such as saving and stock trading. Furthermore, an enhanced regulatory environment might also be attributed to the market's significant client growth in the Asia-Pacific region. As the government displays concern to protect consumer funds, most authorities have a reputation for imposing severe rules. In addition, the region is recognized for having a primarily young population. Neobanks, in particular, appeal to younger, more tech-savvy consumers. Neo banking is ready for expansion in APAC, due to the large share of young people with expanding levels of disposable income, increased internet and mobile coverage, and a largely untapped market.
However, a lack of trust and reluctance to transfer to an unknown provider rather than the existing institutions that customers trust is a major impediment to converting to digital banks across the region. Furthermore, a large proportion of customers were either unaware of the existence of Neo banks or had no idea how they worked, which is a common trait for a Neo bank market in its early phases of development. However, 70% of Asia Pacific customers would at least consider a financial product offered by a non-finance source, with a preference for digital banking solutions offered by well-established shops, IT organizations, or telecommunications firms. Enabling costs have also been a substantial barrier to entry for customers in rural areas of the market. Because of the lack of infrastructure and high relative costs, a large segment of the population is unable to consider becoming digital bank adopters.
