Digital banks in Asia Pacific

Adding value to financial services?

Regulators across the Asia Pacific region have shown a marked interest in encouraging the growth of digital banks. However, with regulators providing little leeway in meeting regulatory requirements, can these lean organisations manage their risks and while maintaining profitability?

Digital banks sit at a confluence of public policy and financial stability objectives - financial development supports the local economy by improving outcomes for customers.

This is a virtuous cycle, where an eye to economic development entails regulatory support for enhanced competition from new entrants. This can generate better customer outcomes and increase financial inclusion fuelled by innovation by incumbents and the new entrants. In turn, economic growth spurs further investments in improved technology and data analytics, contributing to further development and competitiveness in the financial services industry as a whole.

In this report, we explore regulatory and market developments in South East Asia, Hong Kong SAR, and Taiwan POC – all jurisdictions that have specific licences for digital banks – as well as the ways in which the risks of digital banks can be mitigated.

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