South-east Asia's tech unicorns may look more like banks in the future
Now, most of South-east Asia's tech unicorns have a bank of sorts under their belt – Grab has GXS Bank in Singapore, GX Bank in Malaysia and Superbank in Indonesia, while Sea has MariBank in Singapore and SeaBank in Indonesia and the Philippines. Sea also operates Ryt Bank as a joint venture with YTL Group.
Even GoTo has backed Bank Jago in Indonesia.
The banking sector is highly regulated, while tech startups, in contrast, often operate in regulatory grey areas where tech can disrupt current business models.
The inroads that these tech-owned banks have made into their markets have been remarkable. For instance, the total deposits for Grab's GXS and GX banks have grown from US$479 million in the first quarter of 2024 to US$1.3 billion in Q1 2025.
The three banks owned by Grab are projected to be collectively profitable by Q4 2026, according to Alex Hungate, chief operating officer of Grab. MariBank is also on track for profitability within the Monetary Authority of Singapore's digital bank licence framework of five years from launch.
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Given these growth trends, there is potential for banking and financial services to make up the bulk of Sea and Grab's businesses. Currently, financial services make up 9.6 per cent of Grab's total revenue for Q1 2025, and 16.2 per cent of Sea's Q1 2025 revenue.
These numbers can quickly multiply, as Grab and Sea ramp up their banking operations in emerging markets such as Indonesia.
Almost half of all adults in that country are unbanked or underbanked, and about 36 million adults remain unbanked in the Philippines.
Running their banks as digital banks has helped to cut costs in serving unbanked and underbanked customers. Technology is making risk management processes such as know-your-customer and credit modelling – in an environment where information is not readily available – cheaper compared with traditional banks.
The opportunities in South-east Asia also include the many micro, small and medium-sized enterprises (MSMEs) that Grab and Sea's banks serve. Traditional banks incur high costs to serve this segment of business customers.
Meanwhile, the new digital banks by Grab and Sea have also utilised technology to serve their retail customers, thus bringing costs down.
It also helps that some of the MSME customers are also Grab or Sea merchants, allowing their banks to access data that traditional banks would not be privy to. The number of orders on Grab's food-delivery platform and Sea's Shopee platform gives the tech unicorns an edge in understanding these customers' monthly cash flow and business performance.
Rising interest rates in the last few years have also allowed digital banks to make money off deposits. Coupled with this edge that Grab and Sea have over traditional banks, the foundation has been laid for their banking businesses to potentially overtake the original business units in terms of revenue.
Grab's mobility and food-delivery businesses are highly dependent on the human factor, given the involvement of drivers, riders and food merchants. Similarly, Sea's Shopee business is equally dependent on merchants being willing to continue to sell on the platform.
This is a factor that both Grab and Sea have less control over; they can influence such actors with incentives and subsidies, but this may result in inefficiencies.
In conventional banking, once a customer is acquired, there is a level of stickiness that comes with participating in financial services transactions. This is unlike customers of delivery and ride-hailing services, who are driven by the lowest price, or with the riders, who may jump ship once the commission percentage changes. Grab and Sea would also wield more control over the supply side of the equation, compared with ride-hailing or e-commerce.
With these factors in mind, it will pay to watch this space, to see if the next incarnation of Grab and Sea will be as banks rather than tech players.
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