Asia Challenger Banks Spotlight

Spotlight Asia: Neobanks and Growth of New Technologies Part Two

Throughout April 2021, The Fintech Times shines a light on neobanks and challenger banks, including their evolution and successes. With digital banks a hot talking point, in this two-part feature we hear from some of the major players in Asia, including Revolut, Wise, WeLab Bank, Zaggle, Aspire and Tonik.

Neobanks – digital banks without any physical bank branches; operating through a platform or a smartphone application –  are growing rapidly.

Despite the region’s heterogeneous monetary policies and economic landscape, Asia is expected to see aggressive growth from neobanks and fintechs over the coming years. Banking competition is predicted to ramp up as regulators in the region accept applications for digital bank frameworks.

In this second installment of a two-part feature, The Fintech Times hears from Aspire, Tonik and Zaggle.


Andrea BaronchelliLaunched in 2018 and headquartered in Singapore, with teams in Vietnam, Indonesia and Thailand, neobank Aspire serves small businesses with financial services.

Andrea Baronchelli, co-founder and CEO at Aspire, has spent the last six years developing marketplace platforms across South East Asia.

He suggests that while most firms still rely on traditional banks for all money matters, neobanks are disrupting the financial space and proving to be just as efficient and potent for businesses – both in Singapore and the rest of Asia.

“From the traditional to modern entrepreneurs, we have seen a rise in the number of people engaging in online banking services, creating the space and opportunity for neobanks to take the lead,” says Baronchelli. “With an increasingly digitised generation of users from all over Asia, integrated solutions have now become the norm for most people and continue to gain traction among new users as well.

“The appeal that these technology-driven financial institutions have lies in their affordable fees, intuitive UX design, and customer-centric approach, which many traditional banks are still catching up with.

For Baronchelli, as the Covid-19 situation continues to develop across the region, many institutions in the financial services sector have had to adapt to this massive change and make the digital shift.

“On the other hand, fintech firms were already one step ahead. In fact, patterns in consumer behaviour were already shifting along with digital technology transformations, and the pandemic merely accelerated this rapid change.

“While digital solutions have proven to be efficient, many are still skeptical about how it works in the first place. But in due time, there’s no doubt that neobanks will be the next banking revolution for businesses in Asia.”


Tonik founder and CEO Greg Krasno

Tonik is one the first digital neobanks in the Philippines, and one of the few neobanks globally that is operating on the basis of its own bank licence. It is backed by major international venture capital investors, including Sequoia Capital, Point72 Ventures, Insignia Ventures and Credence Partners.

Tonik believes that the existing Filipino banking customers and the 70 per cent of the Filipinos that remain unbanked deserve a better banking choice that is simple, not intimidating, and helps them to dream big and save even bigger.

The Philippines has a population of more than 100million with values of US$140billion in retail deposits, and the potential of becoming a US$100billion asset class in consumer lending.

Tonik founder and CEO Greg Krasnov –  a serial entrepreneur – tells The Fintech Times: “With the pandemic still raging, nobody really wants to ever go to a bank branch again. This enforces our key proposition of neobanking and the demand for more cutting-edge banking solutions.

“At Tonik, we are consistently on the lookout for partners and technologies to equip our mobile app in terms of higher levels of security and reliability in all stages of customer experience.

“We are closely working with other international names, such as Mastercard and Finastra, in making our systems as intuitive and secure as possible. As we ramp up our consumer loans offering, one of the technologies we are focused on is alternative credit scoring. Through this, the loan customer experience becomes more accurate, secure and real-time which is a far cry from the tedious process that Filipinos are accustomed to with current providers.

“The response to our public launch last month has been overwhelmingly positive. Since then, we have secured over 14,000 active customers, translating to over US$20million in deposits. This gives us growing confidence in scaling up our suite of services to reach more Filipinos in the next few years.”


¬¬¬Avinash Godkhindi, MD & CEO of Zaggle International fintech and payments firm Zaggle was founded in 2011 with a vision to become a global digital bank. For the past eight years, Avinash Godkhindi has led Zaggle as MD & CEO with a focus on business development.

According to Zaggle, although neobanking is a relatively new term in all parts of Asia, the rising investments in the neobanking space and the enormous growth rate are positive signs.

It suggests Covid-19 has acted as a catalyst for the increased acceptance of fintech in India. The increased penetration of innovative technology simplifies the banking process and is entirely disrupting the traditional banking patterns.

“The Covid-19 pandemic has significantly transformed the digital landscape and has accelerated the wave of digitisation world over,” says Godkhindi. The increased dependency on online services might fasten the adoption of neo banking. Fintechs are not only disrupting the traditional payment infrastructure but, the entire traditional banking ecosystem, right from retail to businesses and is expected to grow both in terms of usage and popularity.

“With technology streamlining operations, it is now possible to make the banking experience hassle-free, simple and user friendly. Since there is a rise in the number of millennials who want access to hyper personalised services at their fingertips, neobanks are poised for rapid growth today.

“Lengthy manual processes, terrible user experience, time-consuming and less efficiency are some of the issues that neobanks have promised to address. Considering the pandemic and ‘the digital-only’ new normal, the scope and opportunity for neobanks to sustain are enormous today.”

Asia growth

Zaggle points to a 2020 McKinsey report, which shows that 40 out of the world’s 100 largest banks in terms of asset capitalisation are Asia based with these banks contributing about 50 per cent of the world’s market capitalisation.

Godkhindi says: “It is quite interesting to view neobanking amid this background. As per an online statistic, the global neobanking industry is likely to witness an annual growth rate of 46 per cent in the period from 2019 to 2026. Simultaneously, the Asian Pacific banking industry is expected to see a growth of 44.5 per cent in the said period.

“With India and China being key growth drivers for the neo banking industry. Some of the reasons, which can be attributed to its significant growth rate are; convenience offered to customers, increased penetration of smartphones and favourable government regulations.”

Aiding the further growth of the neobanking sector in the Asian continent is the significant number of people without bank accounts, says Zaggle. As per a 2018, World Bank report, India has about 190 million people without access to proper banking facilities and it comes in second to China which has 225 million citizens who too lack access to this facility.

“So it provides neobanks a vast pool of people to offer their services and in turn lead the growth trajectory for the Indian and Asian banking sector,” says Godkhindi. “At present India has about 15 neobanks, with some of the prominent ones being SBI YONO, Razorpay, InstaPay and Open, etc.”

“To conclude, with the world, gradually adapting to new and revolutionary financial technology, neobanks are pretty much the need of the hour, which has further been given an impetus by the events of the last year. They offer customers a whole lot more than traditional banks and offer access to banking facilities to a large no of people. With banking regulators seeing their efficacy and its advantages, neo- banking is likely to significantly bloom and revolutionise the banking sector in the Asian continent.”

Look back to the first part of this two-part feature,
where we hear from Revolut, Wise and WeLab Bank.




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