The global digital banking platform market size is expected to reach $10.87 billion by 2027, which means that it’s expanding at about a 13.6% CAGR (compounded annual growth rate), according to estimates from Allied Market Research (AMR).
A release that summarizes that findings of the report notes:
“Growing adoption of online banking over traditional banking drives the growth of the global digital banking platforms market. North America contributed the highest share in 2019, and will maintain its dominance throughout the forecast period. During the Covid-19 pandemic, users are preferring digital banking platforms such as internet banking to avoid physical contact with individuals and prevent transmission of coronavirus.”
But the report also mentioned that compliance and online data security issues may begin to limit the growth of the virtual banking market. Despite cybersecurity issues, the digital banking sector is on track to grow steadily in the coming years due to advancements in related technologies such as artificial intelligence (AI) and machine learning (ML).
AI and ML are used to make intelligent decisions about key business and banking processes. They may also be used to analyze large amounts of data in order to determine the creditworthiness of an application. Additionally, AI can help detect suspicious or potentially fraudulent transactions by using context clues or by looking for certain patterns in the way payments or transactions are made.
The report further noted that the Reserve Bank of India (RBI) has confirmed that around twice as many transactions were made via digital banking platforms in April 2020 (when compared to March 2020 which was the time the Coronavirus pandemic began).
Virtual banks across the globe appear to be doing quite well and continue to launch new products and promotional offers. Digital banking group Varo Bank has launched Varo Advice, which is a new product that instantly advances up to $100 to qualifying customers. As noted in a release, the new offer is “designed to help customers proactively manage their finances, Varo Advance offers instant access to up to $100 cash right in the Varo Bank app.”
US digital banking platform Greenwood recently revealed that there have been over 100,000 sign-ups just days after its debut.
As covered, emerging digital technology breakthroughs in AI and IoT are fundamentally changing consumers’ banking experience, according to a new report. Meanwhile, another report found that consumers in European countries like Germany are not downloading new digital banking apps as much as expected (in a post COVID world). However, they’re still using the virtual banking apps they’ve already installed a lot more than before, the report revealed.