A comparative analysis of regulatory governance of digital banking in Asia: licensing frameworks, financial inclusion, and market dynamics

Abstract

This paper aims to explore the unique digital banking regulatory landscape in Asia, shaped by tailored licensing frameworks designed to boost financial inclusion and address specific market demands, and to examine the role of technology in future regulatory frameworks. The study employs a comparative analysis of key Asian jurisdictions, including Hong Kong, Malaysia, Singapore, Philippines, Taiwan, South Korea, Pakistan, and Japan. It examines their regulatory requirements for digital-only banking operations, assesses market penetration, and details the operational status of licensed entities as of 2025. The analysis highlights three critical implications of Asia’s distinctive regulatory approach: the profound technological dependencies of digital banks, the evolving dynamics in the relationship between consumers and banks, and the new paradigms of accountability required for technology-only banking operations. This paper provides a timely and focused comparative insight into Asia’s pioneering digital banking licensing regimes and their market outcomes. It offers critical analysis for regulators, industry stakeholders, and researchers examining the region’s rapidly evolving financial ecosystem and its divergence from Western regulatory philosophies.