The market is expanding due to greater digitization, increased usage of online banking tools, and rising demand for non-transactional services. Several financial institutions are combining with other financial corporations to improve their services to client requirements. Young people have an edge since they are quite comfortable with web apps. In a recent Oracle poll, it was discovered that 86% of customers stated they wanted to make payments online, while 60% said they wanted to create bank accounts online. Additionally, the government has made an effort to encourage digital banking, which is a fantastic potential for market growth. Due to this action, people are becoming more aware of the technology that is beneficial for society. Adhar Pay, BHIM UPI, and NEFT are just a few low-cost digital platforms the Indian government created in 2019 for Indian consumers. Another newly-emerging market development prospect is the progress of technology. Increasing the usage of blockchain, AI, and other emerging technologies. However, the risk of cyberattacks is impeding industry expansion.
COVID-19 IMPACT
Customer preferences for remote and digital capabilities have increased due to the ongoing COVID-19 epidemic. Mobile customer contact with banks was predicted tod increase more quickly between December 2019 and May 2020 than during the pre-COVID-19 timeframe. Due to greater adoption during the lockout, certain end-use markets have seen a boost in digital payments. Examples include online pharmacies, OTT players (telecom and media), EdTechs, online gaming, recharges, and utility/bill payments.
DRIVING FACTORS
Market is Expected to Grow as a result of Cost Effectiveness and User-Friendliness in Financial Transactions
The cost-effectiveness and ease of use advantages of digital banking over traditional banking systems, the rising popularity of electronic devices, and the accessibility of high-speed internet services are the main market drivers for the sector. These factors are anticipated to support growth over the forecast period. The market projection for digital banking may be affected by the rising risk of data breaches and cyberattacks on banking servers. Further supporting the global digital banking market are technological developments like the incorporation of blockchain technology.
RESTRAINING FACTORS
High Potential for Market Restriction due to Security Concerns with Consumer Personal Data
Consumers continue to trust the brick-and-mortar business model for transactions involving their money. Still, most people believe that banks are where they should go to handle their finances. Therefore, the largest barrier to the digital banking business's growth is consumer belief in physical and mortar. Most banks and financial institutions invest a lot of money in cyber security, but they must be proactive in catching fraudsters and reducing risks. Most consumers are still unwilling to take a chance when making purchases online, which is thought to be the main barrier to the market's expansion.
SEGMENTATION
By Type
The digital banking market is segmented by type: credit unions, cooperative banks, and consumer banks. The consumer bank category dominated the market in 2021. Consumer banks' strong growth can be mostly related to rising top-line revenue, cost savings, and reduced risks. They are governed for and by the people. Their fundamental value is serving their members, thus they initially provided that service through their physical branches and are now entirely going toward digitization.
By Service
By service, the market is segmented into digital payments and digital sales. The largest service sector in the digital banking market, digital payments, is anticipated to dominate during the forecast period. The growth of banking products and services through online platforms is driving digital sales by banks worldwide.
REGIONAL INSIGHTS
North America is projected to hold the largest share of the digital banking market over the forecast period. One of the main objectives of most financial organizations is to keep a customer for life. As a result, large American banks like Bank of America and others are using crucial developmental methods like product releases and others to preserve the client and customer data so that they can get in touch with their current customers to increase their sales.
On the other hand, the Asia Pacific digital banking market is anticipated to grow significantly over the forecast period. Banks' adoption of an omnichannel approach to address varied consumer needs defines the regional industry. Both individual and business consumers widely use digital channels. Huge financial technology expenditures are driving digitization and changing the statistics for the sector. For instance, in the first half of 2021, financial technology investments totaled more than USD 7 billion in Asia-Pacific.
LIST OF KEY COMPANIES PROFILED:
- Industrial and Commercial Bank of China Limited
- Bank of China Limited
- Bank of America
- Citigroup
- China Construction Bank
- Agricultural Bank of China
- Wells Fargo
- JPMorgan Chase
- HSBC Group
- China Merchants Bank
KEY INDUSTRY DEVELOPMENTS:
- September 2021: TCS developed and made the BaNCS cloud available, enabling the servicing of assets of all kinds. Their debut is aimed at custodians, dealers, brokers, and other parties.
- June 2020: Temenos and Next Neobank will work together to build a digital banking infrastructure during COVID-19 to supply crucial digital banking services quickly.
| Attributes | Details |
| Study Period | 2016-2028 |
| Base Year | 2021 |
| Estimated Year | 2022 |
| Forecast Period | 2022-2028 |
| Historical Period | 2016-2020 |
| Unit | Revenue (USD Million) and Volume (Kilo Tons) |
| Segmentation | By Type, By Service and By Geography |
| By Type |
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| By Service |
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| By Region |
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