Are Digital Banking Solutions Profitable for Banks?

The global pandemic has accelerated demand for digitization in the banking industry, and digital banking platforms are now taking center stage.

Let us demonstrate the potential opportunities that banks can grasp with digital banking solutions as well as the future trends toward digitization in the banking sector.

Trends

The introduction of new technologies and migration to a cashless society creates a favorable future for digital banking solutions for end-users and financial institutions.

The digital payment market is expected to be worth a staggering $361.3 Billion by 2030 (1)
All countries will be functionally cashless by 2030(2)
By 2024, digital banking users are expected to reach 3.6 billion worldwide (3)
66% of bankers globally agreed that there will be a 20% decrease in bank branches by 2025(4)
77% of bankers claim that 3/4 of new accounts will be opened using digital channels by 2025(5)

The top 3 retail banking trends(5) for 2023 that can be facilitated by a digital banking solution are:

Removing friction from the customer journey
Expanding digital products and payments capabilities
Using big data, AI, advanced analytics, and cognitive computing

Opportunities

A digital banking platform offers great potential for banks to smoothen their operations, reduce costs and increase revenue streams.

At least once per month, approximately 94% of mobile banking users access digital banking services (6)
In 2023, the functionality of chatbots will help the banking industry save roughly $7.3 billion in customer support expenses (7)
Nearly 82% of customers are not willing to switch their banks due to online services and platforms (8)
Digital banks can offer 1-2% more annual percentage yields when compared to traditional banks due to reduced costs (9)
References
  1. https://www.bloomberg.com/press-releases/2022-09-19/digital-payment-market-to-hit-opportunities-worth-361-30-billion-by-2030-grand-view-research-inc
  2. https://www.globaldata.com/media/thematic-research/banking-will-centered-around-smartphone-2030-countries-become-functionally-cashless-says-globaldata
  3. https://www.juniperresearch.com/press/digital-banking-users-to-exceed-3-6-billion
  4. https://thefinancialbrand.com/news/banking-branch-transformation/bank-branches-omnichannel-digital-delivery-trends-132770
  5. https://thefinancialbrand.com/news/banking-trends-strategies/top-10-retail-banking-trends-and-priorities-predictions-2023-157672
  6. https://www.enterpriseappstoday.com/stats/digital-banking-statistics.html
  7. https://www.juniperresearch.com/press/bank-cost-savings-via-chatbots-reach-7-3bn-2023
  8. https://www.consumeraffairs.com/news/online-banking-has-become-more-widespread-among-consumers-survey-finds-103119.html
  9. https://www.investopedia.com/articles/pf/11/benefits-and-drawbacks-of-internet-banks.asp

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