Southeast Asia's digital banking race: licences, super-apps and the incumbents' reply

Few regions have digitised money as quickly as Southeast Asia. The 2025 e-Conomy SEA report by Google, Temasek and Bain estimates that the region's digital economy is on track to surpass $300 billion of gross merchandise value, growing at about 15% a year, and that more than 60% of all payments in the region are now digital¹. Ten Southeast Asian countries use national unified QR systems and eight have enabled cross-border QR interoperability¹. Digital financial services draw around half of the region's private funding deal value².

The foundations were laid by central banks and payment operators. Thailand recorded 20.4 billion real-time payment transactions in 2023, the third-highest volume in the world³. In Indonesia, Bank Indonesia reported 13.66 billion QRIS transactions in 2025 against a target of 6.5 billion, with 59 million users and 42 million merchants, around 90% of them micro, small and medium-sized enterprises⁴. Its 2026 targets are 17 billion transactions, cross-border usage across eight countries and 45 million merchants⁴.

Wallet adoption tells the same story. ACI Worldwide and GlobalData found that 90% of consumers in Indonesia and 87% in Malaysia used mobile wallets in 2023, close to India's 91%³. Asia-Pacific accounted for 185.8 billion real-time transactions in 2023, forecast to reach 351.5 billion by 2028³.

Regulators opened the door, carefully

Unlike markets that let challengers scale freely, Southeast Asian regulators designed their digital bank regimes with guardrails. Bank Negara Malaysia's 2020 framework allowed up to five licences and imposed a foundational phase of three to five years in which a digital bank's assets are capped at RM3 billion, so that licensees demonstrate viability before scaling⁵. In the Philippines, Bangko Sentral ng Pilipinas lifted its moratorium in January 2025, allowing up to ten digital banks against six in operation, then closed the application window on 1 December 2025; applications remained under review in July 2026⁶. Singapore licensed five digital banks, split between full and wholesale licences⁷.

Payments were won quickly; profitable lending was not

The economics of digital banking in the region remain challenging. Singapore's five digital banks reported combined losses of S$290.9 million in FY2025, with only one reaching profitability, a wholesale-focused bank that earned S$16.1 million⁷. Deposits have proved easier to gather than loans: new entrants can attract balances with rates and slick onboarding, but building a profitable, well-underwritten loan book against established banks with long customer histories is slower and more expensive.

Ecosystem-linked players have one structural advantage: in-app data. The e-Conomy SEA report notes that digital lending growth is being driven by ecosystem players using in-app data for underwriting, and that financial inclusion is expanding through embedded lending aimed at underserved segments¹. Globally, BCG notes that in some markets the customer bases of digital-first banks are now on par with those of traditional players⁸, and McKinsey finds that the largest fintechs have raised their share of comparable revenue from 10% in 2021 to 17% in 2025⁹.

Super-apps and e-wallets: partners as much as rivals

The region's super-apps and e-wallets own daily engagement: rides, food, commerce and QR payments at the merchant counter. That engagement generates exactly the behavioural and cash-flow data lenders need, which is why several ecosystems have sought banking licences of their own. But engagement is not the same as a durable, low-cost funding base or a proven credit engine. Wallet balances tend to be small and transactional, and unsecured lending to new-to-credit customers is expensive to get right through a cycle.

This creates room for partnership. Incumbent banks bring balance sheet, funding stability, credit discipline and regulatory experience; platforms bring distribution and data. Embedded lending, deposits and insurance offered inside partner apps, with the bank retaining underwriting and risk management, can grow faster than either could alone. The e-Conomy SEA research also finds unusually strong appetite for AI in the region, with 79% of workers saying they have learned to use AI¹, which suggests customers will be receptive to AI-assisted servicing and advice from whichever provider offers it first.

Cross-border is the next frontier

Regional connectivity will widen the contest. Nexus Global Payments, founded by the central banks of India, Malaysia, the Philippines, Singapore and Thailand and joined by Indonesia in 2026, aims to let instant payment systems connect once and reach every member¹⁰. Go-live is targeted for 2027¹¹. For banks, that shifts competition on remittances, SME trade and travel spending from proprietary corridors to shared rails, where price transparency and customer experience decide share.

How incumbents should respond

• Compete on credit, not on deposit rates. Use transaction, QR and cash-flow data to underwrite SMEs and thin-file customers that digital players are targeting.
• Match digital onboarding and KYC speed with automated verification and AI-assisted review, without loosening controls.
• Partner with ecosystems to embed deposits, credit and insurance in super-apps and merchant platforms, keeping the balance sheet and risk engine in-house.
• Prepare for Nexus and cross-border QR with transparent pricing, real-time FX and 24/7 liquidity management.