Digital banking platforms market is witnessing rapid growth due to the rise of mobile devices/smartphones and the trend of banks gradually replacing their ATMs with online banking systems. Digitization leads to increased user convenience, security, speed, cost effectiveness, versatility and sustainability. Digitization also reduces manual work by using software automation. This increases productivity resulting in competitive services at reduced costs for both providers and users of financial service products.
Banks are Increasingly Opting for Digitalization to Sustain Intense Competition
From launching mobile apps to using the internet to pay bills, many consumers are already taking advantage of fintech services for their day-to-day needs. Banks are trying to keep pace by offering similar services or partnering with fintech companies. Experts say technological advances will continue at a rapid pace in the coming years, making it easier for customers to manage their money and do transactions online, which could reduce banks' revenue. From the past few years, digital banking platforms market have been gaining traction since numerous financial technology startups have emerged around the world offering products that help people send money to family members in other countries without having to pay high wire transfer fees or exchange currency. Some also use software programs that automatically track payments due on credit cards or loans and make sure bills are paid on time.
Banks have been slow to react to the digital revolution and are now trying to play catch-up. A lot of the things that we think of as cutting-edge fintech offerings from companies like Square or PayPal were actually started by banks years ago. Banks are also partnering with technology companies to offer services such as mobile payments. For example, JPMorgan Chase has partnered with Apple to allow customers to make payments using their iPhones. And Wells Fargo has teamed up with Google to allow customers to pay bills and transfer money using voice commands.
Challenge: Large Customer Base Reluctant to opt for Digital Banking
Despite the advances in digital banking, there are still some consumers who prefer to use traditional banking methods. For example, in the United States cash is still used in about 40% of all transactions, according to a Federal Reserve survey published in 2019. According to Ugo for Business, a website devoted to small businesses from France's second-largest bank, Natixis, only 15% of payments between individuals are done electronically.
Most citizens around the world have not become completely comfortable with online banking and prefer face-to-face interaction when managing their finances. But over time more people will get used to using technology more frequently throughout their daily lives. Big banks may have some work cut out for them as they try to compete with new fintech companies that offer innovative products at lower prices than banks can provide. All these factors are likely to slow down the digital banking platforms market growth to some extent.
Retail Banking Putting Up Extra Efforts in Digitalization to Improve Customer Experience
In a global context characterized by increasing competition between financial service providers and banks, the retail banking sector shows signs of being among the digital leaders. In fact, 75% of consumers worldwide aged over 16 years stated that they could conveniently do their banking from a smartphone or tablet. Furthermore, recent statistics show that 42 million people used online or mobile banking for their everyday needs in 2020. Retail banks are making significant investments in digitizing their operations.
In terms of retail banking, the aim is to provide customers with a convenient and user-friendly experience that meets all their needs in one place. In order to keep up with the competition, retail banks are shifting away from traditional methods of customer service and adopt innovative technologies. Such technologies can include chatbots for providing 24/7 customer support, or artificial intelligence (AI) for automating certain processes such as fraud detection. In addition, mobile apps can be used to provide real-time updates on account balances and transactions.
Asia Pacific and Latin America Digital Banking Platforms Market Offering Lucrative growth Opportunity
Emerging digital banking platforms market are a crucial focus for digital banking growth. In Asia Pacific, for example, the number of digital banking users is expected to reach 590 million by 2021 – more than twice the number in 2016. And in Latin America, the market for digital banking is growing even faster, with an estimated annual growth rate of 16%.
This presents a huge opportunity for financial institutions looking to expand their customer base and drive revenue growth. But it also requires a different approach to banking in these regions. In Asia Pacific and Latin America digital banking platforms market, there is a large population of unbanked and underbanked consumers who can be reached through digital channels. Digital banking can provide these consumers with access to basic financial services, such as checking and savings accounts, loans and money transfers. And as these regions become more connected through smartphones and the internet, it is becoming easier for financial institutions to reach consumers at a low cost.
Asia Pacific is now home to over 1 billion smartphone users – around 40% of the total population – while there are 757 million internet users in Latin America, representing about 53% of the population. While Asia Pacific has the highest number of digital banking users – about 453m people at end-2016 – Latin America's market is growing quickly: digital banking penetration stood at 17%, compared with Asia Pacific's 26%.
Prominent Players in Global Digital Banking Platforms Market
Some of the key players in the digital banking platforms market are Appway (Switzerland), Alkami (US), Apiture (US), Backbase (Netherlands), EdgeVerve (India), ebankIT (England), BNY Mellon (US), CR2 (Ireland), Finastra (UK), Mambu (Germany), MuleSoft (US), Fiserv (US), Intellect Design Arena (India), nCino (US), Oracle (US), SAP (Germany), NCR (US), NETinfo (Cyprus), Sopra Banking Software (France), Temenos (Switzerland), Velmie (US), Worldline (France) TCS (India), and Technisys (US).
Key Elements Included In The Study: Global Digital Banking Platforms Market
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