With the September 19 deadline for Thailand’s digital bank license applications less than a month away, it is worth taking a closer look at the prospective applicants. As expected, startups are absent. Instead, the likely applicants – and winners – are a mix of Thailand’s ultra-wealthy tycoons, prominent incumbent banks and Asian tech giants. The newest would-be applicant belongs to the latter category.

Airwallex, a plucky Tencent-backed B2B payments company founded in Australia, said on Aug. 15 that it has surpassed US$100 billion in annual processing volume, a 73% annual increase. The company, which has moved its corporate headquarters several times since its 2015 founding and is now based in Singapore, said it has seen growing volumes across all products and an annual run rate revenue of almost $500 million. While these numbers suggest that Airwallex continues to experience robust growth amid a broader fintech slowdown, it remains unprofitable.

Ant Group and Globe-backed Mynt, which operates the e-wallet GCash, is on a roll. Long one of the most valuable startups in the Philippines, it this month saw its valuation increase to US$5 billion – more than doubling its previous valuation of US$2 billion that it reached in 2021 – following a combined US$800 million capital injection from Japan’s MUFG and the Philippine conglomerate Ayala. The new funding for Mynt comes at a time when large fintech investments are hard to come by given high interest rates and more-stringent investor expectations.

There is a fundamental problem with digital banks in Hong Kong. Not only are they non-essential because the city’s population is so well banked, they also are almost all the offshoots of large incumbent lenders and/or tech companies. What that means is that most of them lack a startup ethos. While a startup mentality can result in massive cash burn – as seen with Revolut in the UK or N26 in Germany – it also can lead to genuine product innovation. In the absence of such innovation, online lenders resort to gimmicks like high deposit interest rates to attract customers. It is thus no surprise that the eight licensees together owned HK$49.9 billion (US$6.4 billion) in assets last year. That is just 0.3% of the assets owned by all the city's retail banks, according to the Hong Kong Monetary Authority’s data.

South Korea’s No. 2 digital bank K Bank had been planning to go public on the Korea Exchange (KRX) at the end of this year, but unfavorable market conditions could force the company to delay the listing. There are three main issues that could adversely impact the IPO: the softening of the U.S. economy, the legal troubles of the founder of rival internet bank Kakao Bank and the souring of regulators’ views on digital lenders.

The Singaporean sovereign wealth fund Temasek has long been one of the largest institutional investors in China, reflecting the close economic ties between the city-state and the world’s second largest economy. As recently as 2020, China accounted for 29% of Temasek’s portfolio. However, today Temasek’s investments in China have fallen to just 19% of its portfolio, below the U.S. at 22% and Singapore at 27%.

Looking at the stock price of Singaporean platform company Grab, one wonders what investors truly think about this company’s prospects. Since its Dec. 2021 Nasdaq debut in a SPAC merger, Grab has lost 74% of its market value. The stock’s 52-week high is just US$3.88. We suspect that investors are concerned about the viability of Grab’s super app business strategy – which may struggle to pivot away from a focus on growth – even if individual units of the company are doing well. Grab does seem confident about its fintech business though and foresees profitability for its Singaporean digital bank before too long.

Who needs more digital banks in Southeast Asia? If you asked us, we would say not too many countries do. Certainly not Singapore, probably not Malaysia or Thailand, and even though Indonesia is a huge market, it already has a lot of online lenders.

What to make of ANEXT Bank? On the one hand, Ant Group has been focused for years now on expanding its presence in Southeast Asia. Its Singapore digital bank, which provides multi-currency business accounts, unsecured financing with flexible repayment options, and fixed deposit accounts to SMEs, is a key part of that expansion effort. And Ant has continuously injected large amounts of capital into ANEXT. On the other, from a financial standpoint, ANEXT’s performance remains underwhelming, and it is unclear how large the company’s addressable market is in Singapore.

Kakao Bank has long proven skeptics of digital banks wrong. It has been profitable since 2019 and is now set to expand in Southeast Asia. There is just one problem: Its parent company’s founder Kim Beom-su was arrested on July 23. He has been accused of manipulating stocks during Kakao’s acquisition of the K-Pop agency SM Entertainment last year.