Home youth program budget Challenger Banks to reach $524 billion in loan disbursements in Asia/Pacific* by 2026

Challenger Banks to reach $524 billion in loan disbursements in Asia/Pacific* by 2026


Online-only Challenger banks thrive in Asia/Pacific, benefiting from policy accommodation and positive reception to digital payments

SINGAPORE, September 21, 2022 – In a recent IDC report titled Asia/Pacific Challengers in 2022: The Road Ahead, IDC estimates that by 2026, established and upcoming challengers will be able to disburse $524.4 billion in loans, a 1.4% share of the Asia/Pacific Household Loan Market.

As the pandemic has shifted most of the interaction of global financial services to digital, online-only challenger banks have seen success in customer acquisition, transaction activity and revenue, but growth is just beginning.

“Despite the nuances in the market, a common theme we found across Asia/Pacific is that most countries are accommodating to digital payments, and this is reflected in their national policies and the massive growth in payment methods. mobile payments like e-wallets,” said Adam Kamarul, market analyst for Financial Insights, IDC Asia/Pacific.

According to IDC, the hurdle now is to convert that growth into corresponding long-term sustainable revenue. The results are mixed in the region. Some challengers manage to turn a large depositor base into growing revenue, while others fail and go out of business a few years after launch. Differentiators include revenue generation strategy, management of consumer and business customer expectations, and market location methods.

Challenger banks should consider the following to thrive in the Asia/Pacific region:

  • Use location, alternative data and intelligent risk models to deliver personalization at scale
  • Rapidly iterate products, applications and systems based on customer feedback
  • Diversify and reinvent revenue streams beyond traditional and fee-based banking
  • Venture into new sectors through data-driven partnerships with non-banking industries to unlock new customer segments through innovative offerings

“The region offers a large addressable market for online-only financial services. By offering banking solutions to underserved SMEs or populations without access to a bank branch, challengers are already gaining market share, concludes Kamarul.

IDC’s report, Asia/Pacific Challengers in 2022: The Road Ahead (IDC #AP47795421), discusses the key development of challenger banks in Asia/Pacific and examines the unique cost structure and revenue channels they seek. It then explores the key drivers of growth in the region through its large addressable market, strong payment infrastructure, and reception of super apps. The report further highlights how Challengers are transforming the customer experience and disrupting traditional banking, the near-term risks for Challengers, and key tips for managing those risks.

For more information about this IDC Perspective document, please contact Adam Kamarul at [email protected] For media inquiries, please contact Miguel Carreon at [email protected] or Michael de la Cruz at [email protected]

*Asia/Pacific excluding Japan


About IDC

International Data Corporation (IDC) is the world’s leading provider of business information, consulting services and events for the information technology, telecommunications and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in more than 110 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community make fact-based technology decisions and achieve their key business goals. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the global leader in technology media, data and marketing services. To learn more about IDC, visit www.idc.com. Follow IDC on Twitter at @IDCAP and LinkedIn. Subscribe to the IDC-Blog for industry news and insights