While Western banks continue to debate whether to modernize their decades-old systems, fintech firms across Asia have already moved past them. These companies are serving millions of previously unbanked users without branches, paperwork or the burden of legacy infrastructure. Rather than competing for existing customers, they have created new ones.
Traditional banks had written off more than 700 million adults across Asia who couldn’t meet minimum balance requirements or provide credit histories. Companies like Tala, Tonik and KreditBee reimagined banking entirely, offering tools that met people where they were, often via smartphones. This shift is unlikely to remain confined to Asia. It provides a preview of what’s to come globally. As these battle-tested, mobile-native companies expand into Western markets, incumbent banks could face an uphill battle they’re not equipped to win.
How Asian fintechs reimagined banking
Challenger banks and fintechs in Asia bypassed the brick-and-mortar model that was once seen as essential to go directly to the people. Rather than retrofitting outdated systems with mobile apps, they built digital infrastructure designed for the smartphone era. This ground-up approach gave them significant operational advantages that traditional banks struggle to match.
Take credit decisions: traditional banks rely on credit histories, collateral and paperwork. Tala and KreditBee, by contrast, approve loans in minutes by analyzing phone metadata and behavioral payment patterns, building financial identities for those never formally served by banks.
The cost benefits of this approach are clear. Tonik, a fully regulated bank in the Philippines, operates entirely online. Every service, from savings to loans to debit cards, runs through a mobile app. Without the overhead of rent, staff and maintenance costs of physical branches, Tonik can profitably serve the 44 percent of Filipinos previously considered unbankable.
This model also proves effective for small businesses. Platforms like Indonesia’s Akulaku and India’s RazorpayX have created full-stack financial ecosystems for micro-entrepreneurs, bundling payment processing, banking and payroll services that traditional banks typically price out of reach or neglect altogether. RazorpayX’s modular system resembles decentralized finance (DeFi) protocols. Businesses can mix and match tools for lending, payments and payroll like building blocks. This composable model enables greater flexibility than the rigid, all-or-nothing offerings seen in traditional financial institutions.
Governments are clearing the path for digital banking
Governments across Asia have played a proactive role in advancing digital banking compared to their Western counterparts: instead of cautious regulation and oversight, they established clear support mechanisms for fintech innovation.
Singapore created the blueprint, launching SGFinDex in 2020, which allows users to unify balances, investments and insurance across multiple institutions through a single interface. They also built APIX, a platform that connects financial institutions with fintechs across borders through an open-architecture platform. Both initiatives are backed by Singapore’s central bank, clearly signaling the government’s commitment to financial innovation.
In Malaysia, Bank Negara established the Financial Technology Enabler Group (FTEG) in 2016 to build regulatory frameworks that accelerate fintech adoption. They launched regulatory sandboxes where companies can test new financial products in controlled environments. India took a bold step by launching Aadhaar, a digital identity system that reduced customer verification from weeks to under 60 seconds. This single infrastructure decision eliminated the biggest barrier to financial inclusion and created the foundation for India’s fintech boom.
From Open APIs, strong digital identity and regulatory support, these policies collectively laid the groundwork for scalable innovation, removing friction that has strangled modernization in Western markets.
The infrastructure is shifting to blockchain
Having established dominance in mobile banking, many Asian governments and fintech ecosystems are now focused on blockchain-based infrastructure. Singapore’s Project Ubin handles interbank settlements and cross-border payments via blockchain, while China’s digital yuan has seen broad deployment across major cities. Thailand and Malaysia have partnered on blockchain cross-border payment systems through Project i2i.
These efforts are already delivering tangible results. Singapore’s blockchain settlement systems have reduced cross-border payment times from days to minutes. China’s digital yuan processed over $14 billion in transactions during its pilot phase alone. The Malaysia-Thailand blockchain rails have lowered cross-border transaction costs.
Blockchain infrastructure enables a modular, interoperable architecture more akin to DeFi than legacy banking systems. Instead of vertical silos, financial functions can now operate horizontally, with building blocks like lending, payments and investments integrating seamlessly across providers.
The fintech infrastructure emerging in Asia reflects a future where digital financial services are fast, flexible and deeply integrated into daily life. While many Western banks still layer digital tools onto systems designed for a paper-check era, Asia’s fintech platforms were built digital-first, from the ground up.
The results speak for themselves. In 2019, Southeast Asia’s digital financial services brought in $11 billion in revenue and is projected to reach $38 billion this year. Digital payments comprise the bulk of the sector and are expected to bring in $1 trillion in transaction value. Meanwhile, India achieved 87 percent fintech adoption—the highest globally. These systems succeed because they were designed for how people actually use money: fluidly, across multiple platforms and without friction.
The pattern points toward crypto rails as the next logical step. Just as Asia’s fintechs demonstrated the value of building digital systems from scratch rather than retrofitting old infrastructure, crypto-native networks offer similar advantages: instant payments across borders, lower costs and composable financial functions. The companies that begin laying this groundwork now may find themselves with the same early lead that propelled Asia’s fintech boom.
