Breaking down the costs of launching a digital bank in Asia Pacific

Opening a bank is expensive, even if you aren’t stumping up for a grand building in the middle of the central business district. That’s right – even the digital banks sprouting across Southeast Asia cost a pretty penny to put up.

Building a new digital bank in the Asia-Pacific region costs around US$20 million to US$45 million, according to The Road Ahead for Asia’s Digital Banks report.

See also: Mapping the companies taking banking digital in SEA

The report is based on info gathered from the Elevandi Insights Forum, which is chaired by the Monetary Authority of Singapore, Synfindo, Affinidi, and the Asian Development Bank. Management consulting firm Oliver Wyman also contributed to the report.

As the graphic from the report shows, tech and software licenses take up a sizable portion of the total build costs at 17%. Unsurprisingly, staff costs get the lion’s share at 45% while marketing and customer acquisition costs account for a 13% share.

The report also notes that out of the US$20 million US$45 million in total costs, around “US$3.5 million up to US$7 million could be allocated to vendor costs.”