Digital Banking Market Scope and Overview
The Digital Banking Market was valued at USD 9.3 Billion in 2023. It is projected to reach USD 24.0 Billion by 2031. Digital banking platforms offer the convenience of 24/7 access to accounts, mobile banking apps for on-the-go banking, and the ability to complete a wide range of transactions without having to visit a physical branch. As smartphone ownership and internet access continue to grow globally, more and more people are able to access and use digital banking services. This is particularly significant in developing economies, where mobile banking can provide a several opportunities for reaching unbanked populations. also, The COVID-19 pandemic accelerated the adoption of digital banking as people were restricted from visiting physical branches.
Some of the Major Key Players Studied in this Report are:
- ACI Worldwide
- Microsoft Corporation
- Fiserv
- Tata Consultancy Services
- Cor Financial Solutions Ltd
- Oracle Corporation
- Temenos Group AG
- Rockall Technologies
- EdgeVerve Systems Limited
- Other Players
Growing Factors Driving the Digital Banking Market
- Open banking initiatives, which utilize APIs, which allow banks to collaborate with third-party fintech firms to offer innovative financial products and services. This can lead to a wider range of offerings for customers and increased revenue streams for banks.
- There are still huge population who are unbanked or underbanked. Digital banking, particularly mobile banking, has the potential to reach these populations and provide them with access to financial services they may not have had before.
- By leveraging artificial intelligence (AI), banks can personalize financial products and services for individual customers.
- As digital banking grows, so do cyber threats. However, this presents an opportunity for banks to invest in robust cybersecurity solutions like biometrics and advanced fraud detection systems.
- Integrating digital banking services with popular lifestyle apps can enhance user convenience.
Market Segmentation and Sub-Segmentation Included Are:
By Type:
- Informational services
- Transactional services
- Communicative services
By Software:
- Customized software
- Standard software
By Banking Type:
- Retail Banking
- Corporate Banking
- Investment Banking
By Service Type:
- Payments
- Processing Services
- Customer & Channel Management
- Wealth Management
- Others
Regional Analysis
North America is a mature digital banking market with a large user base, and it was valued at USD 7.4 billion in 2023 and is expected to reach USD 14.2 billion by 2030, growing at a CAGR of 9.3%. and this dominance is due to the presence of established financial institutions with a strong focus on security and compliance. For Eg. In June 2024, Bank of Montreal (BMO) announced a partnership with Amazon Web Services (AWS) to migrate its core banking system to the cloud. This move aims to improve scalability, agility, and innovation in BMO’s digital banking offerings.
The Asia Pacific region is the fastest-growing digital banking market globally. due to the rapid smartphone adoption and a large unbanked population that mobile banking can reach. Fintech companies are playing a significant role in driving innovation in the Asia pacific region. however, Fintech companies play a more prominent role in driving innovation in the Asia Pacific market compared to North America. for e.g. Alibaba’s financial affiliate, Ant Group, launched a new digital bank called “MYbank” in the Philippines. This new bank aims to provide microloans and other financial services to Filipinos, particularly those in underserved areas.
Recent Developments
In May 2024, JPMorgan Chase partners with Plaid to offer account aggregation. This collaboration allows Chase customers to connect their accounts with other financial institutions through Plaid’s platform. This will enable them to view all their financial information in one place and potentially leverage new financial management tools. This partnership signifies a growing trend of traditional banks embracing open banking to provide a more holistic financial experience for their customers.
In April 2024, HSBC launches AI-powered virtual assistant for wealth management, this virtual assistant, named “Amy,” utilizes artificial intelligence to analyse customer data, provide personalized investment recommendations, and answer wealth management-related questions. This development highlights the increasing adoption of AI in digital banking to enhance customer service and personalize financial experiences, particularly in wealth management.
Key Takeaways
- Digital banking has the potential to reach unbanked and underbanked populations, promoting financial inclusion.
- Artificial intelligence, blockchain, and biometrics are transforming the digital banking landscape, enhancing security, personalization, and efficiency.
- North America has a mature market with a focus on core banking solutions, while Asia Pacific is experiencing rapid growth driven by mobile banking and fintech innovation.
- As digital banking grows, robust cybersecurity solutions are crucial to build trust and attract customers.
Table of Contents
- Introduction
- Industry Flowchart
- Research Methodology
- Market Dynamics
- Impact Analysis
- Impact of Ukraine-Russia war
- Impact of Economic Slowdown on Major Economies
- Value Chain Analysis
- Porter’s 5 Forces Model
- PEST Analysis
- Digital Banking Market Segmentation, by Type
- Digital Banking Market Segmentation, by Software
- Digital Banking Market Segmentation, By Banking Type
- Digital Banking Market Segmentation, By Service Type
- Regional Analysis
- Company Profile
- Competitive Landscape
- USE Cases and Best Practices
- Conclusion
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