Challenger Banks in Asia-Pacific - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The challenger banks market in Asia-Pacific is segmented based on the services offered, end-user type and by country - Growth, Trends, and Forecast (2020-2025).

Market Snapshot

Challenger Banks in Asia-Pacific (2020-2025)
Study Period: 2016 - 2026
Base Year: 2021
CAGR: 45.5 %

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Market Overview

Digital banks, also known as neobanks, challenger banks, or virtual banks, all have in common are they often started with no physical branches and leveraged technology to differentiate their offerings in the banking sphere. Asia’s digital banking scene has seen rapid growth in recent years and is set to continue its growth in the months to come.

The collective customer base of the neo and challenger banks is expected to grow at a CAGR of 45.5% from 2020-2025, a growth that will be driven by factors such as favorable government regulations, the convenience offered to consumers, and higher interest rates than traditional banks. 63% of banking customers in Asia-Pacific (APAC) are likely to use digital banking services offered by neobanks and challenger banks by 2025, highlighting the urgency for banks to innovate.

More than 35 neobanks or challengers across APAC are built on agile innovative best practices — way ahead of incumbents in terms of flexibility, self-service capabilities, customer needs, and personalization. Consequently, with the emergence of new players and further digital disruption in the industry, 38% of traditional banks’ revenues are at risk by 2025.

Scope of the Report

An understanding of the Challenger Banks in Asia-Pacific, regulatory environment, challengers banks, and their business models, along with detailed market segmentation, product offerings such as deposits, loans to define their financial performance indicators, current market trends, changes in market dynamics, and growth opportunities. In-depth analysis of the market size and forecast for the various segments.

By Service Type
Savings Products
Current Account
Consumer Credit
By End-User Type
Business Segment
Personal Segment
By Country
South Korea
Hong Kong
Rest of Asia-Pacific

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Key Market Trends

Market Opportunity: High mobile penetration and High Unbanked adults in the region

Emerging markets in the region present a large opportunity for challenger banks due to three major factors: Large unbanked population; high mobile penetration and growing middle class.

250 Million adults in Southeast Asian countries are unbanked, which sums up to a mere 27% of adults having a bank account. Most countries in the region have mobile penetration of well over 100%, ahead of the penetration levels in the United States and on par with the European market. 

Only 48% of Indonesians aged 15 years or older have a bank account. Over 2 million unbanked adults in Malaysia. Only 30% of Vietnamese aged 15 years or older have a bank account. Only 32% of Filipinos aged 15 years or older have a bank account.


Financing Activity on Rise into Challengers in Asia-Pacific

Challenger banks are becoming attractive and are able to convince investors that their business models and valuations seem to work out for real. This resulting in a spree of equity financing or M&A activities in this market. For example, Kakao, a Korean communications company launched KaKao Bank, Korea’s internet-only bank in 2017. It amassed 300,000 customers in 24 hours, US$930 million in deposit in one week, and has more than 6.5 million accounts in 1 year. The number of new accounts opened with Kakao in 24 hours exceeded what some incumbent and challenger banks have managed in a year. 

Similarly, many challengers seem to build confidence in the investors to put their money in the firms and attached below is an infographic presenting the financing activities in the challengers over the past 6 years (2013-2019).


Competitive Landscape

The report includes an overview of challenger banks operating across the region. We wish to present detailed profiling of a few major companies which cover product offerings, regulations governing them, their headquarters, and financial performance. Currently, some of the major players dominating the market are listed below.

Table of Contents


    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study




    1. 4.1 Market Overview

    2. 4.2 Insights on Partnerships between Challenger Players And Other Fintechs

    3. 4.3 Latest Technologies Deployed by Challengers in Banking System

    4. 4.4 Performance Indicators of Challenger Banks

    5. 4.5 Industry Policies And Government Regulations

    6. 4.6 Market Drivers

    7. 4.7 Market Restraints

    8. 4.8 Value Chain / Supply Chain Analysis

    9. 4.9 Porters 5 Force Analysis

      1. 4.9.1 Threat of New Entrants

      2. 4.9.2 Bargaining Power of Buyers/Consumers

      3. 4.9.3 Bargaining Power of Suppliers

      4. 4.9.4 Threat of Substitute Products

      5. 4.9.5 Intensity of Competitive Rivalry

    10. 4.10 Impact of COVID-19 on the Market


    1. 5.1 By Service Type

      1. 5.1.1 Payments

      2. 5.1.2 Savings Products

      3. 5.1.3 Current Account

      4. 5.1.4 Consumer Credit

      5. 5.1.5 Loans

      6. 5.1.6 Others

    2. 5.2 By End-User Type

      1. 5.2.1 Business Segment

      2. 5.2.2 Personal Segment

    3. 5.3 By Country

      1. 5.3.1 China

      2. 5.3.2 South Korea

      3. 5.3.3 Australia

      4. 5.3.4 Hong Kong

      5. 5.3.5 India

      6. 5.3.6 Indonesia

      7. 5.3.7 Philippines

      8. 5.3.8 Malaysia

      9. 5.3.9 Singapore

      10. 5.3.10 Rest of Asia-Pacific


    1. 6.1 Market Competition Overview (Market Concentration And M&A Deals)

    2. 6.2 Company Profiles

      1. 6.2.1 WE Bank

      2. 6.2.2 MY Bank

      3. 6.2.3 Eon

      4. 6.2.4 Paytm Payments Bank

      5. 6.2.5 Digi bank

      6. 6.2.6 Jenius

      7. 6.2.7 SBI Sumishin Net Bank

      8. 6.2.8 Kakao Bank

      9. 6.2.9 K Plus

      10. 6.2.10 Timo

      11. 6.2.11 Volt

      12. 6.2.12 Xinja

      13. 6.2.13 BigPay

      14. 6.2.14 Neat*

    3. *List Not Exhaustive

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Frequently Asked Questions

The Challenger Banks in Asia-Pacific market is studied from 2016 - 2026.

The Challenger Banks in Asia-Pacific is growing at a CAGR of 45.5% over the next 5 years.

WeBank, MY Bank, EON Bank PH, Paytm Payments Bank, Jenius Bank are the major companies operating in Challenger Banks in Asia-Pacific.

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