Digital banks in South-east Asia face profit pressure as rates slump and credit risks rise

[SINGAPORE] Digital banks in South-east Asia could be hitting an inflexion point, as falling interest rates and rising credit risk pose roadblocks in the industry’s nascent rise.

The path towards profitability remains a difficult journey for many digital banks in the region. Neither Singapore nor Malaysia have had any players turn a profit.

Falling interest rates have further dealt South-east Asia’s digital banks a bad hand, as the region’s central banks surprised markets by easing policy in the face of market uncertainties.