Digital Banking Market – Trends Forecast Till 2030

Market Snapshot

Market Overview

The global Digital Banking market size was estimated at USD 13.8 billion in 2023 and is projected to reach USD 25.4 billion in 2030 at a CAGR of 14.8% during the forecast period 2024-2030.

The digital banking market is poised for substantial growth, with a projected compound annual growth rate (CAGR) of 14.8% from 2023 to 2030, as highlighted in the report. This growth trajectory is primarily driven by the global surge in digitization, which has revolutionized the way banking services are accessed and delivered. Digital banking encompasses a range of online and mobile services that enable customers to manage their finances efficiently, including transferring funds, checking account balances, and paying bills, all through internet-connected devices. This shift towards digital solutions is supported by the increasing adoption of smartphones and tablets worldwide, enhancing the convenience and accessibility of banking services. One of the key drivers of this market expansion is the banks' focus on developing customer-centric products and services. Many financial institutions are increasingly partnering with FinTech companies and third-party service providers to enhance customer experience and streamline service delivery. This collaborative approach not only boosts customer satisfaction but also accelerates innovation in digital banking solutions. Additionally, the adoption of cloud-based platforms is gaining momentum, offering scalability and flexibility that traditional banking systems often lack. The move towards digital banking is further fuelled by the growing consumer preference for conducting financial transactions online, driven by the high penetration of electronic gadgets and the widespread availability of high-speed internet services. Moreover, advancements in artificial intelligence (AI) are playing a pivotal role in transforming digital banking. AI technologies are enhancing customer service through chatbots, improving fraud detection with sophisticated algorithms, and personalizing banking experiences through data analytics. These innovations are expected to open up new revenue streams and enhance operational efficiencies for banks. The increased focus on cross-selling and upselling strategies also presents significant opportunities for market growth, as banks look to expand their service offerings and deepen customer engagement. Despite these opportunities, the market faces challenges such as consumer reluctance towards digital transactions and difficulties in integrating new digital banking platforms with existing legacy systems. Security concerns remain a critical issue, with increasing incidents of cyber threats posing risks to customer data and transaction integrity. These challenges necessitate continuous advancements in cybersecurity measures and regulatory compliance to safeguard digital banking operations. Overall, the digital banking market is set to witness remarkable growth, driven by technological innovations, changing consumer behaviors, and strategic partnerships. Banks that successfully navigate the challenges and leverage emerging opportunities are expected to gain a competitive edge in the evolving financial landscape.

Delvens Industry Expert's Standpoint

The digital banking landscape is rapidly evolving with advancements driven by consumer demand for convenience, sustainability, and financial flexibility. As mobile banking gains popularity, institutions are integrating sustainability criteria into their services, reflecting a growing consumer preference for ethical investment options. For instance, Danske Bank's introduction of sustainable finance insights in its mobile app illustrates a proactive response to Nordic customers' desire for transparency and impact measurement in their investment portfolios. Moreover, the rise of "buy now, pay later" (BNPL) options is reshaping consumer spending habits, particularly among younger demographics like millennials and Gen Z. This trend not only promotes responsible spending by offering interest-free or low-interest installment plans but also enhances average transaction sizes for merchants. Financial institutions and fintech companies are increasingly focusing on providing seamless digital experiences and personalized financial solutions to meet these evolving consumer preferences. Innovation in digital banking, exemplified by Google Pay's recent enhancements, underscores this trend. By expanding BNPL capabilities and integrating card benefits directly into the checkout process, Google Pay enhances online shopping convenience and security, catering to a broader base of U.S. consumers. These developments signify a strategic shift towards offering more flexible payment options and leveraging digital platforms to enhance user experience and engagement in the financial services sector. As the market continues to evolve, collaboration between traditional banks and fintech innovators will be crucial in driving further innovation and meeting the diverse needs of modern consumers worldwide.

Market Portfolio

Key Findings

• On the basis of Services, the digital banking market is divided into transactional services & non-transactional services. The transactional services segment held a major market share of around 82% in 2023. Transactional services in digital banking are essential for facilitating immediate financial needs. For instance, cash deposits and withdrawals provide convenient access to funds, reducing reliance on physical branches. Fund transfers enable swift and secure money movement across accounts and borders. Automated services like auto-debit and auto-credit streamline recurring payments, ensuring timely transactions without manual intervention. Digital loan processes offer simplified applications and faster approvals, enhancing accessibility to credit. These services collectively drive the adoption of digital banking by enhancing efficiency and convenience for users.

• On the basis of Mode, in 2023, the online banking segment dominated the digital banking platform market, commanding an 81.2% revenue share. This segment is poised to maintain its leadership, projected to grow at a CAGR of 19.7% throughout the forecast period. Online banking encompasses a range of services including inter-account transfers, balance reporting, and other retail banking tasks, enabling customers to manage finances conveniently from their homes or workplaces via telecommunication networks. Meanwhile, the mobile banking segment is anticipated to grow at a faster CAGR of 22.3% in the forecast period. This growth is driven by lower service fees and the increasing penetration of smartphones, which facilitate easy access to banking services on the go. Mobile banking's flexibility and convenience appeal to a broad demographic, enhancing its adoption globally. These trends underscore a shift towards digital channels in banking, reflecting evolving consumer preferences for seamless and accessible financial management solutions.

• On the basis of Banking, In the banking segment, retail banking dominates, serving individual consumers with products like savings accounts and loans. It's driven by accessibility, convenience, and personalized experiences, generating revenue through fees and interest. In India, digital payments surged from 162 crore to over 14,726 crore transactions from FY13 to FY24, highlighting rapid adoption of digital banking services.

• The market is also divided into various regions such as North America, Europe, Asia-Pacific, South America, and Middle East and Africa. Asia Pacific dominated the digital banking market, attributed to the expanding population base and widespread internet connectivity. Countries such as China, India, and Indonesia are at the forefront of this transformation.

Regional Analysis

Asia Pacific to Dominate the Market

• Asia Pacific leads the global digital banking market, driven by a vast population base and widespread internet access. Countries like China, India, and Indonesia are pivotal in this growth, where mobile payment platforms and digital wallets have revolutionized daily transactions.

• North America, stringent cybersecurity measures are paramount, with partnerships like Visa and Expel enhancing defenses against cyber threats. Meanwhile, Europe focuses on integrating advanced technologies like AI and biometrics to improve customer service and operational efficiency while ensuring compliance with rigorous regulatory standards.

Competitive Landscape

• Appway AG.
• THE BANK OF NEW YORK MELLON CORPORATION
• CREALOGIX AG.
• ebanklT
• ETRONIKA
• Fidor Solutions AG
• Finastra
• Halcom
• ieDigital
• Infosys
• Intellect Design Arena Ltd
• NETinfo Plc
• NF Innova
• Oracle
• SAP
• Sopra Steria
• Tata Consultancy Services Limited.
• Technisys
• Temenos Headquarters SA
• Worldline

Recent Developments

• In May 2024, Revolut, a London-based FinTech firm, announced plans for expansion into the Asia Pacific region, focusing on markets such as New Zealand and Singapore. Building on its success in Australia, where it has garnered 600,000 customers and seen significant transaction volume growth, Revolut aims to replicate its achievements by tapping into new markets in Asia Pacific.

• In September 2023, Bank of America launched "Erica," an AI-powered virtual assistant embedded within their mobile app. Designed to provide personalized financial insights and streamline banking transactions, "Erica" aims to enhance user experience through intuitive digital interactions. This innovative use of AI technology underscores Bank of America's commitment to leveraging advanced digital solutions to meet the evolving needs of their customers, making banking more accessible and efficient.

Reasons to Acquire

• Increase your understanding of the market for identifying the most suitable strategies and decisions based on sales or revenue fluctuations in terms of volume and value, distribution chain analysis, market trends, and factors.
• Gain authentic and granular data access for the Digital Banking Market to understand the trends and the factors involved in changing market situations.
• Qualitative and quantitative data utilization to discover arrays of future growth from the market trends of leaders to market visionaries and then recognize the significant areas to compete in the future.
• In-depth analysis of the changing trends of the market by visualizing the historic and forecast year growth patterns.

Report Scope