Neo-banks in Asia-Pacific countries saw a surge in new customers in the first half of 2021, according to Finbold research.

The number of new neobank customers in the region increased from 63.1 million in 2020. to 134.8 million in the first half of 2021, a staggering increase of 113.62 percent.

“The Asia-Pacific region is seeing interest in neo-banks due to the growth of tech giants aiming to capitalize on technological innovation in the region,” Finbold said.

“Popular demand for online banking services has also contributed to growth, especially during the coronavirus pandemic, which has kept most people confined to their homes.”

There were a total of 437.2 million neobank customers in Asia Pacific as of H1 2021. compared to 302.4 million in 2020. and 239.3 million in 2019.

Finbold noted that, along with the effects of the pandemic, products offered by neobanks, such as stock trading, as well as a predominantly young, tech-savvy population, helped boost customer growth.

Improvements in regulation in response to the “significant security risk” that neobanks pose have also helped boost popularity, according to Finbold.

“Most authorities have a reputation for introducing strict regulations as the government expresses caution to protect consumer funds,” the report said.

According to the data, 13 neobanks were launched in Australia in the first half of 2021, the second highest number in the region after India with 14.

The strong growth of neobanks has led major banks in the region to increase their digital efforts, which have also been further accelerated by the impact of COVID-19.

“Traditional banks, however, still face challenges such as an outdated legacy technology architecture,” Finbold said.

“Usually when new technologies are developed, they sit on top of the bank’s existing infrastructure, complicating it.”

John Bragg

John Bragg is a journalist for Momentum Media’s Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.