A wave of digital banks, or neo-banks, has flourished recently in Western nations as individuals begin to run away megabanks

. While the majority of these start-ups are yet to prove they can turn a profit, business owners are starting to reproduce comparable ideas in South Asian markets, where most people do not have accounts with conventional banks at all. And for now, investor are backing this effort.

Tonik Financial, a two-year-old startup in the Philippines, stated on Monday it has raised $21 million in a brand-new funding round to introduce its digital bank focused on the Southeast Asian market by September this year.

Sequoia Capital India and Point72 Ventures led Tonik’s Series A round, while existing investors Insignia and Credence took part in it, the startup said, which has actually raised $27 million to date.

Tonik, which recently got the license to operate a digital bank in the Philippines, said it will commercially introduce the digital bank in the third quarter of this year.

Greg Krasnov, the creator and president of Tonik, said according to his quotes, the retail savings market in the Philippines deserves $140 billion and the Southeast Asian country also provides a $100 billion chance in unsecured consumer lending. TechCrunch could not independently prove these market estimates.

Krasnov, who has formerly bred four financial services start-ups in Asia, said the coronavirus pandemic has actually prompted individuals to double down on their cost savings and has made it obvious that the huge majority of individuals in the Philippines need access to a digital bank.

“In the Philippines, where over 70% of the population remains unbanked, we are observing a fast jump in customer demand for digital banking and digital transfers because the start of the year,” he said.

“We are preparing to bring an extremely differentiated experience to the Filipino customer to address these requirements and are honored to be supported in this by the regulators who have motivated innovation and invited innovation options to strengthen financial inclusion,” he added.

In several South Asian markets, where, like the Philippines, much of the population stays unbanked, start-ups are racing to fill deep space. But interestingly, the majority of them are serving startups and other little and medium companies– and not individuals.

In India, for instance, Bangalore-based NiYo Solutions and Open are two of the heavily-backed startups that have collected over a million organisations on their platforms.

RazorPay, another Bangalore-based start-up, in 2015 released a series of features, such as corporate charge card, and a single control panel to help businesses manage deals and offered them with the capability to automate repeating payouts. Some of these functions are presently not used by a standard bank.

Article curated by RJ Shara from Source. RJ Shara is a Bay Area Radio Host (Radio Jockey) who talks about the startup ecosystem – entrepreneurs, investments, policies and more on her show The Silicon Dreams. The show streams on Radio Zindagi 1170AM on Mondays from 3.30 PM to 4 PM.