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Digital Banking Market Size By Type (Retail Banking, Corporate Banking, Investment Banking), By Service (Transactional [Cash Deposits & Withdrawals, Fund Transfers, Auto-Debit/Auto-Credit Services, Loans], Non-Transactional [Information Security, Risk Management, Financial Planning, Stock Advisory]), Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2021 – 2027

  • Report ID: GMI2651
  • Published Date: Nov 2021
  • Report Format: PDF

Industry Trends

Digital Banking Market size exceeded USD 8 trillion in 2020 and is projected to register gains of around 5% from 2021 to 2027. The total digital payment value in 2020 accounted for USD 750 trillion with digital transactions exceeding 900 billion in volume globally.
 

Digital Banking Market

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Increased use of mobile devices by consumers to perform their day-to-day financial tasks is likely to propel the industry growth. Customers use digital banking services to check their bank balance, deposit checks, transfer funds, and for online shopping. Additionally, the growing millennial population (aged between 16 to 34) is driving banks toward digital banking services.
 

Amid the ongoing COVID-19 pandemic, customer preferences for remote and digital capabilities have been accelerated. Between December 2019 and May 2020, it was estimated that mobile customer engagement with banks will grow faster than in the pre-COVID-19 phase. Several end-use markets have witnessed an uptick in digital payments due to increased adoption during the lockdown. These include online grocery stores, online pharmacies, OTT players (telecom and media), EdTechs, online gaming, recharges, and utility/bill payments.
 

High-profit margins in corporate banking across the U.S.

U.S. Digital Banking Market Size, By Type

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In the U.S., the corporate banking segment is poised to generate more than USD 135 billion revenue by 2023. Corporate banking offers financial services to large clients (wholesale clients, large corporations, and other institutions such as pension funds and government & public entities). Corporate banking is a highly profitable division for banks, significantly profitable than retail banking, which is aimed toward households and SMEs.
 

The increasing need for reduced complexity is augmenting the corporate digital banking market growth. Traditional banks have multiple rivals and multiple portals, which are often inconvenient for corporates with multiple banking relationships. Digital banking services reduce the complexity of managing cash and transactions across multiple bank relationships.
 

Card-less transactions offered by digital banking apps in the UK

UK Digital Banking Market Share, By Service

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In the UK, transactional services are anticipated to account for nearly 90% of the digital banking market share by 2027. Cash withdrawal has been made highly convenient with digital banking becoming mainstream. The majority of digital banks across the region have enabled their customers to generate a cash withdrawal voucher from their mobile banking app, which can then be redeemed at any ATM outlet for withdrawal of cash without requiring a card. Other associated benefits of digital banking-based deposits & withdrawals include easier cash loads and enhanced security features, which are expected to boost the market demand for digital banking transactional services.
 

The UK non-transactional services market is estimated to witness a growth of over 5% till 2027. Information security services are rapidly gaining traction as the banking sector has been increasingly investing in digital infrastructure compared to other industry verticals. This has led to the rising proliferation of cyberattacks on banking institutions. Such attacks erode substantial market value and cause irreparable damage to the reputation of an organization. Owing to these factors, banking establishments are increasingly investing in information security services to protect sensitive information and ensure customers’ trust.
 

Widespread adoption of mobile technologies will expand the Asia Pacific market demand

Asia Pacific Digital Banking Market Share, By Country

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Asia Pacific digital banking market is expected to see significant growth of about 25% CAGR through 2027. The regional industry is characterized by the adoption of an omnichannel strategy by banks to meet various customer needs. Digital channels have strong penetration in the region with both individual and corporate customers. Hefty investments in financial technologies are fueling digitization and driving the industry statistics. For instance, total investments in financial technology across Asia Pacific crossed USD 7 billion in H1 2021.
 

The emergence of mobile payments has brought about a change in the shopping habits of online consumers in the region. Mobile payment is increasingly becoming popular due to e-commerce and mobile internet penetration. Following these trends, leading regional IT giants, such as Alibaba, Tencent, and Baidu, have entered the fintech services sector with innovative financial solutions. Such developments by enterprises in the region are expected to propel the market demand for digital banking solutions.
 

Aggressive collaborations between traditional banks and fintech players

The digital banking market is analyzed to be highly competitive owing to the presence of both multinational companies and fintech start-ups in the space. Industry participants are mainly focusing on collaboration with banking institutes to gain significant share. Prominent players are placing an ever-growing emphasis on delivering advanced digital banking solutions that can cater to the dynamic requirements, especially during the rise of AI-enabled automation amid the ongoing pandemic.
 

The industry has also observed several strategic alliances between key players to launch new products with added functionalities and maintain revenue share & profitability such as the June 2020 collaboration of Temenos with Next Neobank to co-develop a digital banking infrastructure for rapid provisioning of vital digital banking services during COVID-19.
 

Some of the key digital banking market players include Appway AG, Bank of New York Mellon Corporation, CREALOGIX AG, ebankIT, Etronika, Fidor Solutions AG, Finastra, Halcom.com, ieDigital, Infosys Limited, Intellect Design Arena Limited, Kony, NETinfo Plc, NF Innova, Oracle Corporation, SAB, SAP SE, Sopra Steria, Tata Consultancy Services Limited, Technisys S.A., Temenos AG, and Worldline.
 

This market research report on digital banking includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2017 to 2027 for the following segments:

Market, By Type

  • Retail banking
  • Corporate banking
  • Investment banking

Market, By Service

  • Transactional services:
    • Cash deposits and withdrawals
    • Fund transfers
    • Auto-debit/auto-credit services
    • Loans
  • Non-transactional services:
    • Information security
    • Risk management
    • Financial planning
    • Stock advisory

The above information has been provided for the following regions and countries:

  • North America
    • U.S.
    • Canada
  • Europe
    • UK
    • Germany
    • France
    • Italy
    • Spain
    • Netherlands
    • Russia
  • Asia Pacific
    • China
    • India
    • Japan
    • South Korea
    • Australia
    • Singapore
  • Latin America
    • Brazil
    • Mexico
    • Argentina
  • Middle East & Africa
    • UAE
    • Saudi Arabia
    • South Africa

 

Authors: Preeti Wadhwani, Smriti Loomba

Frequently Asked Questions (FAQ) :

The market size of digital banking crossed USD 8 trillion in 2020 and will record gains at a 5% CAGR up to 2027 owing to the rising usage of mobile devices by consumers to perform their day-to-day financial tasks.

Corporate banking, which is expected to capture a revenue share of over USD 135 billion in the U.S. by 2023, retail banking, and investment banking are a few main types of digital banking.

Transactional services are expected to bring around 90% share through 2027 in the U.K, due to the growing number of digital banks in the country.

Asia Pacific market will grow at a CAGR of more than 25% through 2027 owing to the surge in number of hefty investments in financial technologies.

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Premium Report Details

  • Base Year: 2020
  • Companies covered: 22
  • Tables & Figures: 449
  • Countries covered: 21
  • Pages: 325

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