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Banking around the world · East & Southeast Asia

East & Southeast Asia

Scale, speed and public rails: five markets setting the pace of digital banking

Banking in East and Southeast Asia spans some of the world's largest banks in mainland China, the global financial centres of Singapore and Hong Kong, and the dual conventional and Islamic systems of Malaysia and Indonesia. Central banks and industry bodies here built instant payment rails and QR standards used by hundreds of millions of people, and regulators move quickly on digital banks, scams and stablecoins. India now has its own South Asia edition.

Learn by playing: 10 casesCompare the regions
SingaporeHong KongShanghaiTokyoKuala Lumpur

At a glance

50.5 millionQRIS users in Indonesia in 2024, with 32.7 million merchants
48%Islamic share of total financing in Malaysia, end-2025 (BNM)
HK$800,000Hong Kong deposit protection limit per depositor since October 2024
1 Jan 2026Mainland e-CNY in bank wallets became interest-bearing deposits
East & Southeast Asia

The markets

CN

China (mainland)

Renminbi (CNY) · Shanghai · Beijing · Shenzhen

Central bank
People's Bank of China (PBOC): monetary policy, payment systems, the e-CNY and macroprudential oversight
Supervisors
National Financial Regulatory Administration (NFRA, since 2023) for banks and insurers; CSRC for securities; SAFE for foreign exchange
Payment rails
CNAPS (HVPS, BEPS) and the IBPS online system, run by the PBOC; NetsUnion clears non-bank online payments; CIPS for cross-border RMB
Open finance
No mandated open-banking regime; data sharing is governed by the Personal Information Protection Law, the Data Security Law and PBOC data-security measures (2025).
Deposit protection
Deposit insurance up to RMB 500,000 per depositor per insured bank (Deposit Insurance Regulations, 2015).
Digital banks
No separate digital-bank licence: privately owned internet banks such as WeBank and MYbank, and direct banks such as aiBank, are licensed as commercial banks.
Islamic finance
No Islamic banking framework in the mainland. Chinese firms have used Islamic capital markets abroad, e.g. a ringgit sukuk by a Beijing Enterprises Water Group unit in Malaysia (2017).
MY

Malaysia

Malaysian ringgit (MYR) · Kuala Lumpur · Labuan

Central bank
Bank Negara Malaysia (BNM): monetary policy and regulator of banks, Islamic banks, insurers, takaful operators and payment systems
Supervisors
BNM for banks and payments; Securities Commission Malaysia for capital markets; Labuan FSA for Labuan; PIDM for deposit insurance
Payment rails
RENTAS for high-value payments; DuitNow transfers and DuitNow QR, JomPAY and FPX, all run by PayNet
Open finance
BNM issued an Open Finance exposure draft in November 2025 proposing phased, consent-based data sharing from 2027; the framework is being finalised.
Deposit protection
PIDM: up to RM250,000 per depositor per member bank; Islamic and conventional deposits are protected separately.
Digital banks
Five licences under BNM's 2020 framework, all live by August 2025: GXBank, Boost Bank, Ryt Bank and two Islamic digital banks, AEON Bank and KAF Digital Bank.
Islamic finance
Dual banking system under the Islamic Financial Services Act 2013; Islamic financing reached 48% of total financing at end-2025; a leading global sukuk market.
SG

Singapore

Singapore dollar (SGD) · Raffles Place · Marina Bay

Central bank
Monetary Authority of Singapore (MAS): central bank and integrated financial regulator; monetary policy is run through the exchange rate
Supervisors
MAS supervises banks, insurers, capital markets and payment firms (Payment Services Act 2019); SDIC runs deposit insurance
Payment rails
FAST and PayNow for instant transfers, GIRO for bulk, MEPS+ for high-value settlement, SGQR for merchants; PayNow links with PromptPay, DuitNow and UPI, and NETS QR links with Indonesia's QRIS
Open finance
No mandated open banking; MAS promotes APIs, and SGFinDex lets people view accounts across banks, insurers and government agencies through Singpass and consent.
Deposit protection
SDIC: up to S$100,000 per depositor per Scheme member, raised from S$75,000 on 1 April 2024.
Digital banks
MAS awarded two digital full bank licences (GXS Bank, MariBank) and two digital wholesale bank licences (ANEXT Bank, Green Link Digital Bank) in 2020.
Islamic finance
No standalone Islamic bank since 2015; banks such as Maybank offer Islamic products. MAS aligned tax treatment with conventional products and set up a sukuk facility in 2009.
HK

Hong Kong

Hong Kong dollar (HKD), linked to the US dollar · Central · Admiralty

Central bank
Hong Kong Monetary Authority (HKMA): currency stability under the Linked Exchange Rate System, bank supervision and payment systems
Supervisors
HKMA for banks and stablecoin issuers; Securities and Futures Commission (SFC) for securities and virtual-asset platforms; Insurance Authority
Payment rails
FPS for instant HKD and RMB payments (since 2018); CHATS for real-time gross settlement in HKD, USD, EUR and RMB; both run by HKICL
Open finance
HKMA Open API Framework (since 2018) sets phased bank API sharing; the Commercial Data Interchange (CDI) lets SMEs share data with banks by consent.
Deposit protection
Deposit Protection Scheme: up to HK$800,000 per depositor per Scheme member since 1 October 2024 (was HK$500,000).
Digital banks
Eight virtual banks licensed by the HKMA in 2019, including ZA Bank, Mox Bank, WeLab Bank, livi bank and Ant Bank (Hong Kong).
Islamic finance
The government issued three sukuk in 2014, 2015 and 2017, US$3 billion in total, after tax law changes from 2013 put sukuk on par with conventional bonds.
ID

Indonesia

Indonesian rupiah (IDR) · Jakarta (Sudirman · Kuningan · SCBD)

Central bank
Bank Indonesia (BI): monetary and macroprudential policy and payment systems, including the QRIS standard and BI-FAST
Supervisors
Financial Services Authority (OJK, bank supervisor since 2014) for banks, capital markets, insurers, online lending and crypto assets; LPS for deposit insurance; PPATK as the FIU
Payment rails
BI-FAST for instant transfers and BI-RTGS for large payments, run by Bank Indonesia; QRIS, the national QR standard, links with Thailand, Malaysia, Singapore and Japan
Open finance
No mandated open banking; Bank Indonesia's SNAP national open API standard for payments (2021) sets common APIs, and the Personal Data Protection Law (2022) governs consent.
Deposit protection
LPS: up to IDR 2 billion per depositor per bank since 2008, for deposits that are on the bank's books, pay no more than the LPS guarantee rate and are not tied to fraud.
Digital banks
No separate licence class: OJK's 2021 commercial bank rules let new or converted banks operate as digital banks, such as Bank Jago and SeaBank.
Islamic finance
Dual system under the 2008 Sharia Banking Law; Islamic banks held about 7% of banking assets (2022). Bank Syariah Indonesia, formed in 2021 from three state-owned Islamic banks, became a state-owned company in January 2026.

How banking is organised in East and Southeast Asia

Each market has its own design. Mainland China's system is led by large state-owned commercial banks under the PBOC and NFRA. Singapore and Hong Kong are international hubs with single strong authorities. Malaysia runs Islamic and conventional banking side by side, and Indonesia combines large state-owned banks with a growing Islamic sector under Bank Indonesia and OJK.

  • China: large state-owned commercial banks, joint-stock banks, city and rural banks, and private internet banks; the NFRA replaced the CBIRC in 2023.
  • Malaysia: conventional banks with Islamic subsidiaries, full-fledged Islamic banks, development financial institutions and five digital banks.
  • Singapore: three local banking groups (DBS, OCBC, UOB) alongside many foreign banks; MAS supervises every financial sector as one authority.
  • Hong Kong: the HKMA keeps the Hong Kong dollar linked to the US dollar; three commercial banks issue banknotes; international banks run regional hubs here.
  • Indonesia: state-owned and private commercial banks, Islamic banks led by Bank Syariah Indonesia, rural banks (BPR) and digital banks; OJK took over bank supervision from Bank Indonesia in 2014.

Payments and open finance

The region shows two paths to instant payments: public rails built by central banks and industry operators (PayNow, DuitNow, FPS, BI-FAST and QRIS), and big-tech wallets in mainland China (Alipay, WeChat Pay) that clear through NetsUnion. Cross-border links now connect domestic rails by mobile number or QR code.

  • Indonesia's QRIS, set by Bank Indonesia and mandatory since the end of 2019, had 50.5 million users and 32.7 million merchants in 2024; micro merchants pay no fee on payments up to Rp500,000.
  • Singapore's PayNow links with Thailand's PromptPay, Malaysia's DuitNow and India's UPI; QR links connect Indonesia's QRIS with Malaysia, Singapore and Thailand.
  • Nexus Global Payments, set up in Singapore in 2025 by Asian central banks, added Indonesia as its sixth jurisdiction in February 2026 and chose a PayNet–NETS venture as technical operator; go-live is pending.
  • Mainland China's e-CNY held in bank wallets became interest-bearing deposits on 1 January 2026, covered by deposit insurance.
  • Open finance differs by market: Hong Kong's Open API Framework, Malaysia's draft policy, Singapore's SGFinDex and Indonesia's SNAP open API standard.

Fintech, digital banks and digital assets

Licensing is deliberate: where digital bank licences exist, regulators granted only a few and let them scale under watch. Big tech is a force in payments and lending, so rules on non-bank payment firms, data and conduct are tight. Hong Kong now licenses stablecoin issuers as well as virtual-asset trading platforms.

  • Hong Kong's Stablecoins Ordinance took effect on 1 August 2025; the HKMA granted the first two issuer licences in April 2026.
  • Malaysia's five digital banks, two of them Islamic, were all operating by August 2025 within BNM's digital bank framework.
  • The operators of Alipay and WeChat Pay are supervised as non-bank payment institutions under State Council regulations in force since May 2024.
  • Singapore's digital full banks serve consumers and SMEs, while ANEXT Bank and Green Link Digital Bank serve businesses only.
  • Indonesia: OJK's 2021 bank rules opened the way for digital banks such as Bank Jago and SeaBank; OJK also licenses online lending platforms and supervises crypto assets.

Rules a bank must map

Prudential rules follow Basel III, but each regulator writes its own technology, outsourcing, fraud and conduct rules. Data protection laws differ by market and shape cloud, analytics and cross-border data choices. Banks with regional footprints map overlapping obligations, not one rulebook.

  • China: NFRA Administrative Measures for the Capital of Commercial Banks (2024), the revised Anti-Money Laundering Law (2025), PIPL and the Data Security Law.
  • Malaysia: BNM Risk Management in Technology (RMiT), capital adequacy frameworks, outsourcing and e-KYC policy documents; Shariah governance under IFSA 2013.
  • Singapore: MAS Technology Risk Management Guidelines, outsourcing rules for banks, AML/CFT notices and the Shared Responsibility Framework for phishing scams.
  • Hong Kong: HKMA Supervisory Policy Manual modules such as OR-2 on operational resilience, the Cyber Resilience Assessment Framework and the PDPO.
  • Indonesia: the 2023 financial-sector law (P2SK), OJK rules on bank IT, digital banking and consumer protection, Bank Indonesia payment rules, and the PDP Law, fully in force since October 2024.

What operations teams wrestle with

Volumes are huge and real-time, so the hard problems are scams, mule accounts, failed and disputed transactions, and keeping legacy cores running at round-the-clock speed. Regulators expect fast redress and firm control of outsourcing, while regional teams juggle languages and time zones.

  • Scams and mule accounts: Singapore's Shared Responsibility Framework, Malaysia's National Fraud Portal (2024) and OJK's Indonesia Anti-Scam Centre push faster detection and holds on scam funds.
  • Disputes and failed payments on round-the-clock rails such as FPS, DuitNow, PayNow, BI-FAST and QRIS need automated reversals, clear turnaround times and root-cause fixes in the bank's own systems.
  • KYC and onboarding: digital identity such as Singpass and Malaysia's e-KYC rules speed account opening but demand stronger fraud controls; Indonesia's PDP Law adds consent and data-security duties.
  • Legacy cores and cloud: outsourcing and technology-risk rules require exit plans, testing and board oversight of third parties.
  • Operational resilience: banks set tolerances for critical services and test them against severe but plausible disruptions.

How SMEs get financed

Banks remain the main lenders, supported by public guarantee schemes and development institutions. Data-led lending is growing fast: tax, invoice and payment data and consented data sharing help lenders assess firms that lack property collateral.

  • China: inclusive-finance targets for loans to micro and small firms, PBOC relending tools, and re-guarantees through the National Financing Guarantee Fund.
  • Malaysia: Credit Guarantee Corporation, SME Bank, BNM funds for SMEs, and equity crowdfunding and P2P financing regulated by the Securities Commission.
  • Singapore: Enterprise Singapore's Enterprise Financing Scheme shares risk with participating lenders on working capital, trade and project loans.
  • Hong Kong: the SME Financing Guarantee Scheme of HKMC Insurance supports bank loans to small and medium firms.
  • Indonesia: the government's KUR (People's Business Credit) programme channels subsidised loans to micro and small firms through banks, and OJK supervises rural banks and online lending platforms.
Islamic finance: an eye opener

Islamic finance across East and Southeast Asia

Malaysia is the region's anchor: a complete legal framework, a dual banking system, Islamic digital banks and one of the deepest sukuk markets. Indonesia, with a dual system under its 2008 Sharia Banking Law, is the other large market. Hong Kong and Singapore built tax-neutral rules and have issued sukuk. Mainland China has no Islamic banking framework.

  • Malaysia's Islamic Financial Services Act 2013 sets Shariah governance, with BNM's Shariah Advisory Council as the apex authority for Islamic finance.
  • Islamic financing was 48% of total financing in Malaysia at end-2025, and AEON Bank and KAF Digital Bank operate as Islamic digital banks.
  • Indonesia: Bank Syariah Indonesia, formed in February 2021 from three state-owned Islamic banks, is among the world's largest Islamic banks by customers; Islamic banks held about 7% of banking assets (2022).
  • Hong Kong issued three government sukuk (2014, 2015, 2017) totalling US$3 billion; MAS in Singapore set up a sukuk facility in 2009.

What it offers everyone

Customers

The price is agreed at the start and tied to a real asset or service, so repayments are clear. Late-payment penalties do not compound and go to charity rather than bank profit, and people who avoid interest gain full access to banking.

Banks and financiers

Financing linked to real trade and assets keeps lending close to the real economy. Profit-sharing structures align the bank with the client's results, and ethical screening builds trust with a growing base of customers and investors.

Savers and investors

Investment accounts and sukuk share returns from identified assets rather than a fixed return on money lent. Screening excludes harmful sectors, and the link to real projects makes the risk easier to see and judge.

The economy

Asset-backed financing ties credit growth to real output and avoids debt-on-debt trading and excessive speculation. Sukuk channel savings into infrastructure, and including people who avoid interest widens the formal financial system.

A concrete opening: In 2025 the HKMA said Hong Kong could work with Dubai on green sukuk. Green sukuk for Asian infrastructure, offered to Gulf and Asian investors through Hong Kong, Kuala Lumpur or Singapore, is a concrete way to link Gulf savings with Asian projects.

Working with banking teams here

Working with banking teams in East and Southeast Asia

Five markets, many languages and working styles. Common norms, though individuals differ: trust is built over time, seniority shapes who speaks first, and agreement in a meeting may be courtesy rather than a decision. English is the working language of banking in Singapore, Hong Kong and Malaysia; Mandarin leads in the mainland and Bahasa Indonesia in Indonesia.

Common norms; individuals differ.

  • Prepare: send an agenda and a short pre-read; decision-makers often review material before the meeting, not in it.
  • Respect seniority: greet the most senior person first, offer business cards with both hands in Chinese-speaking settings, and use titles until invited otherwise.
  • Confirm in writing: summarise decisions, owners and dates after each meeting; a quiet room does not always mean agreement.
  • Bilingual material helps: a Mandarin, Malay or Bahasa Indonesia summary alongside English shows respect and widens reach.
  • Hospitality matters: tea and a shared meal often build the relationship that carries a project through difficult phases.
Learning from each other

What the GCC can learn from East & Southeast Asia

  • Indonesia's QRIS: one national QR standard that brought tens of millions of small merchants into digital payments, with no fee for micro merchants on small payments.
  • Malaysia's complete Islamic finance architecture: one law, an apex Shariah authority, VBI and Islamic digital banks working together.
  • Singapore's shared responsibility for scams: clear duties for banks and telcos, and a defined order for who bears losses.

What East & Southeast Asia can learn from the GCC

  • GCC experience in taking Islamic retail and corporate banking into the mainstream of national banking systems.
  • Sovereign and corporate sukuk programmes that fund infrastructure and deepen local capital markets.
  • Transformation programmes that link banks, regulators and fintechs to national visions through sandboxes and open banking frameworks.
The World tour · East & Southeast Asia

Ten cases from East & Southeast Asia

Decide as bankers there decide: +1 if right, −1 if wrong, and every answer explained. Your score counts on the open MTWAFIQ Future Leaders board.

CultureCustomersDigital banksMarketsOpen financeOperationsPaymentsRegulationRisk and complianceSME and corporate
Learn by playing: 10 cases
The other regions
GCCIslamic finance at scale, national instant rails and regulators that move fastMENAEgypt's scale, Jordan's shared rails and Morocco's bridge to AfricaEuropeWhere global banking rules are written: a banking union, a single rulebook and instant euro payments by lawUK & wider EuropeLondon's rulebook, Swiss and Norwegian rails, Türkiye's scale and Ukraine's resilienceNorth AmericaDeep markets, many banks and payment rails modernising across three economiesLatin America & CaribbeanBrazil's Pix, Colombia's Bre-B and open finance set by ruleSub-Saharan AfricaSouth Africa's instant rails, Kenya's mobile money, West Africa's shared central bankSouth AsiaIndia's public rails, Pakistan's Islamic shift and Bangladesh's mobile moneyCentral Asia & CaucasusKaspi's super app, Astana's financial centre and new Islamic windowsAustralia & NZTrans-Tasman banking: real-time rails, data rights and firm conduct rulesCompare the regionsAll eleven regions in one table

Further reading

Country register: central banks, supervisors, AML, data protection and deposit insurance, country by country →

Facts checked in October 2026. Banking rules change often, so check the official source before you rely on a detail. Bank and company names show the market; they do not imply any relationship with MTWAFIQ.