Propelled by the rapidly improving internet availability worldwide, the digital banking industry is experiencing momentous growth in recent years. With the higher obligation to facilitate customer engagement, improved profitability, and control, the stronger need for automating the traditional banking services has paved the path for real-time payment transactions.

In fact, digital banking can be touted as a major technological transformation as it allows users to generate automatic payments for regular utility bills, including electricity, phone, gas, and credit cards. Apart from convenience, it facilitates banking work around the clock, providing 24×7 access to banking functions. The increasing risk of counterfeit currency in fund transfers will also instill a favorable scenario for the digital banking market development.

Lately, customers are switching banks for digital features, such as mobile payments, bills and loan applications. Through affordable smartphones and ease of internet access in remote areas, these services are increasingly sought by the rural population.

Driven by these benefits, a large number of participants operating in this business space are focusing on several growth-driven marketing partnerships for increased revenue sales and an expanded customer base. For instance, in March 2021, Finastra collaborated with the Union of Arab Banks for helping banks across the Arab League member states in offering enhanced digital services to their customers.

Enumerated below are the recent parameters that will craft the future of the digital banking industry avenue.

Growing popularity of retail banking

Retail banking, in current times, has grown significantly crucial as it ensures the public saves and invests their money as well as handles their regular needs with the help of various services, including bank accounts, credit and debit cards, fixed deposits, and loans. This type of banking engages directly with consumers and lets them access these services from their phones and computers. It can be considered extremely beneficial for students who are settled or study abroad.

The rising influx of various new platforms, including Banking-as-a-Service, is ensuring third parties connect with banks and help financial institutions diversify their product and revenue streams. The digital banking market will also grow with the increasing number of online withdrawals and deposits across the world.

Huge capital funding from investment banks

Investment banking caters to multiple purposes and business entities offering various types of financial services, including proprietary trading, mergers, and acquisitions advisory to help organizations. It is a special segment of banking operations assisting individuals or organizations in raising capital and providing financial consultancy services. This digital banking acts as an intermediate between the security issuers and the investors as it enables new firms to go public.

The tight security infrastructure associated with investment banking will also aid the digital banking industry’s growth in the near future. These banks control lots of capital as they do transactions in millions and billions. They are hence highly favored for financing big projects, such as dams, railroads, and large infrastructural projects, among others.

Booming demand for transactional services

Digital transactions are witnessing a significant boom in the banking industry on account of their growing benefits for companies in terms of saving time and money. Other than enhanced customer experiences, transactional digital banking improves tracking capabilities in order to reduce errors. These services help industries in improving their businesses and staying competitive by making the transaction easier, faster, as well as more accurate, and convenient.

To summarize, digital banking allows consumers to perform various banking functions from the comfort of their homes. The COVID-19 pandemic also acted as a significant driver for the expansion of the digital banking market considering the growing usage of contactless payments, digital wallets, and mobile apps, giving consumers an edge in banking, transacting, and moving money conveniently.

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