Banking on the unbanked

Banking on the unbanked

TNEX, the first digital bank in Vietnam, aims to bring some 40 million unbanked consumers into the financial ecosystem. Photo:
TNEX, the first digital bank in Vietnam, aims to bring some 40 million unbanked consumers into the financial ecosystem. Photo:

Southeast Asia's fintech scene is going from strength to strength, with the regional industry valued at up to US$100 billion at the end of last year. Yet it has so far only produced a handful of unicorns -- startups valued at more than $1 billion.

That statistic could change, however, given that many regional players are focusing on solving two key problems -- how to increase financial inclusion and how to make mobile banking and payment a simple, seamless activity.

But how can banking on the unbanked, people with little or no access to banks and financial institutions, create such value?

Digging into the region's demographics can help shed some light on this issue as fewer than half the people in Southeast Asia's three most populous countries have a bank account: 48.9% in Indonesia, 34.5% in the Philippines and 30.8% in Vietnam, according to the Global Findex Index.

This means that most people in those countries have little or no connection with the formal financial industry, a stark contrast to Singapore, Malaysia and Thailand which are home to much higher banked populations of 97.9%, 85.3% and 81.6% respectively.

The Covid-19 pandemic accelerated digital transformation around the world, helping reduce the digital divide across Southeast Asia where high adoption of mobile phones and smartphones has enabled more people to connect with digital financial services.

Nevertheless, the region is still home to 290 million unbanked people, almost five times the population of Thailand, according to Fitch Ratings.

There are a number of interesting movements taking place across the region to address this issue. Expanding mobile payment and banking options and integrating them with other lifestyle and social media platforms is a common theme, which will also help increase financial inclusion.

Two of the region's tech unicorns, SEA from Singapore and Gojek from Indonesia, are actively expanding in the digital finance space. The industry has been abuzz for months with talk that Gojek and Tokopedia, another Indonesian unicorn, are set to merge. While Indonesia is the region's largest financial technology market, it has yet to start licensing digital-only banks.

By contrast, Vietnam recently launched TNEX, the country's first digital bank which aims to bring some 40 million unbanked consumers into the financial ecosystem and connect them with small businesses.

In the Philippines, which receives the fourth highest number of international remittances in the world due to its large population of 12 million workers overseas, there is a lot of activity in the mobile wallet space.

Mynt, which operates the GCash mobile wallet used by 33 million Filipinos, recently teamed up with Singapore's Telcoin to provide a blockchain-supported digital remittance service between Canada and the Philippines. Mynt, backed by Ant Group, is also close to joining the ranks of the region's fintech unicorns after a recent round of fundraising.

These developments are just some examples of innovation within the region's fintech space and the development of a digital financial ecosystem that includes banks, lifestyle platforms and a host of non-traditional players.

Focusing on solving problems for people at the margins of the digital divide is essential for developing a more equitable and productive society. It also provides exciting opportunities for building world leading companies adept at seeing financial barriers of financial as an opportunity to rollout transformational technologies at a fast pace.

Suwatchai Songwanich is an executive vice-president with Bangkok Bank. For more columns in this series please visit

Do you like the content of this article?

Japan probing mistreatment of pregnant foreign trainees

The Japanese government is conducting a survey to determine whether foreign technical trainees have been forced by employers or intermediary groups to leave the country because they fell pregnant or gave birth.


+1,902 cases

There were 29 more Covid-19 fatalities and 1,902 new patients admitted to hospitals on Friday, according to the Public Health Ministry.


How to make a brand big in China

After just six years in China, Mistine is now a major seller of sunscreen and foundation.