The Juniper Research team has shared key insights on digital-only banking and other Fintech trends encompassing neobanks and the emergence of Fintech innovations offered via digital banking platforms.
The digital banking market is an evolving space, with digital banks racing to get banking licenses, create innovative platforms for “consumers and businesses, and drive the adoption of financial technology across developing markets.”
Digital banking represents an evolution in the financial services sector, characterized by the transformation of banking activities “that are traditionally performed in physical branches.”
Juniper Research defines digital banking as: Where a customer uses a digital channel, such as online or via a mobile app, to access banking services.
This can encompass a range of services accessible via internet-connected devices, such as smartphones or computers, “allowing customers to manage their finances anytime and anywhere.”
Digital-only banking is where a bank only has “a digital presence, with no physical branches.”
The term neobank is used interchangeably with digital-only bank, whereas the term challenger bank can “include any new bank that is not necessarily digital-native.”
The origins of digital or virtual banking can be traced back to the introduction of ATMs in the 1960s, and was then “accelerated by technological advancements in the 1990s as the Internet became available in developed markets.”
In the 2000s, the proliferation of the Internet created digital banking “as a viable alternative to traditional banking services.”
As for the current state of the market, the growth of digital-only banking users is being driven by deployment of APIs (Application Programming Interfaces), which help unlock “efficiencies in data sharing across third parties, also known as Open Banking.”
When Open Banking was introduced, it primarily facilitated and “focused on the viewing of account data.”
The effective use cases of Open Banking have since been recognized, and, as such, it is now being used to “facilitate a range of financial services and processes within the market.”
Open Banking helps with integrating one service with another and “enabling consumers to switch between financial service providers.”
Additionally, Open Banking includes the sharing of data such “as transactions, payments, and account balances.”
This allows for the integration of various financial services “originating from different sources, creating a seamless user experience.”
Juniper Research’s ranking of 100 fintech startups is based on an evaluation of many aspects, such as total capital raised, the scope of their product portfolio, and the level of “creativity and innovation utilised by its technological offering.”
This assessment provides rankings for the fintech startups in their respective subindustry, identifying the Future players of “key high-growth areas.”
The top 10 Fintech Future firms ranked by Juniper Research are:
- SteelEye
- dLocal
- Billie
- Monobank
- Xapien
- Zuora
- Tabby
- Volt
- Mercury
- BeZero Carbon
The analysis shared by Juniper Research noted that it has identified SteelEye as the top fintech future leader due to its focus on “integrating and collating large volumes of data to simplify trade surveillance, better detecting illegal practices such as insider trading and market manipulation.”
The report from Juniper Research also noted that SteelEye’s data model allows financial services to detect illegal practices such as insider trading, spoofing, and wash trading, which will be “critical as regtech rapidly grows in importance for banks.”
