APAC neo banks face trust barrier despite 8% CAGR

Mordor Intelligence sees expansion through 2030 even as rural access gaps slow uptake.

Asia-Pacific’s (APAC) neo banking market is seen to register a compound annual growth rate of 8% from 2025 through 2030, driven by higher demand for online banking prompted by the pandemic, according to Mordor Intelligence.

Lockdowns and movement restrictions increased demand for online banking services, driving more consumers to digital-only platforms. 

Growth has continued after the pandemic, supported by broader product offerings and regulatory developments.

Neo banks have positioned themselves to help customers meet short-term financial goals, including savings and stock trading. 

However, limited trust remains a key challenge. Many consumers are hesitant to switch from established banks to newer digital providers. 

Awareness is also an issue, with a significant share of customers either unfamiliar with neo banks or unclear about how they operate. 

Even so, 70% of APAC customers say they would consider a financial product offered by a non-financial provider, particularly digital banking solutions from established retailers, technology firms or telecommunications companies.

Access remains uneven, particularly in rural areas where infrastructure gaps and higher relative costs restrict adoption. 

These enabling costs continue to limit entry for a portion of the population.

According to data from Finbold, neobanks in APAC added 134.8 million customers in the first half of 2021, bringing the total to 437.2 million. 

This represents a 44.57% increase from 302.4 million customers in 2020. In 2019, the region had 239.3 million neo bank customers. 

New customer additions rose by 113.62% between 2020 and 2021, from 63.1 million to 134.8 million. Between 2018 and 2019, 233 million new customers were added.

There are currently 68 neo banks operating in Asia-Pacific. Whilst this is fewer than in Europe and the United States, the sector is still developing and may expand further as regulatory frameworks become clearer. 

India has 14 neo banks, the highest in the region. Australia follows with 13, whilst Hong Kong has 12 digital banks, the most in East Asia. China has four neo banks, but leads globally in customer numbers with 220 million users.