show
show
Witnessing the digital breakthrough

How Consumer Benefits are Helping to Drive the Digital Banking Revolution

24 October 2019 14:30, UTC
How Consumer Benefits are Helping to Drive the Digital Banking Revolution
By Vance Carver

The emerging digital banking sector is on a winning streak this year, with some big tech startups securing massive funding rounds from large-scale investors. Relatively new UK-based startup Monzo broke records last year when it raised over $1 million in crowdfunding in less than two minutes. One of its main competitors, German digital bank N26, has managed to attract 3.5 million customers since its launch a few years ago.

Most recently, Singapore announced via it's Monetary Authority that it will begin accepting applications for new digital banks, including from organizations that are not traditionally related to banking. This is a significant change, as it could potentially give an entirely new and untapped sector of online services the ability to provide financial solutions to their customers.


“It’s well overdue, in terms of more choices for customers,”

said Anthony CHIAM of J.D. Power, speaking to CNBC.

Power to the people

04.10.2019  |   in BNT Reviews
The huge rise in popularity of digital banking can be attributed to the excellent benefits the banks are able to offer their customers. One of the most common gripes associated with traditional banking is high fees — especially those applied to international transfers. In the modern world, where many young professionals travel extensively, the ability to transfer money quickly and affordably between countries is a huge attractor. Many new digital banks have proven their worth in providing simple solutions to this problem, as well as many more.

Quick and easy registration, 24/7 online accessibility and low entry requirements mean digital banking has become the choice of millions of young people the world over. Traditional financial institutions are commonly averse to change, with banking being one of the slowest industries to embrace new technology. However, with the explosion of mobile phone usage and a huge increase in internet connectivity globally, banking has finally been catapulted into the tech world of the 21st century.


"Bankers are not generally known for innovation and have been behind the curveball in the business of transformation, but things are changing on a global scale - and consumers are reaping the benefit,"

says Jason BLICK, CEO of corporate digital banking provider EQIBank.


"The question is whether incumbent banks can embrace the necessary transformations before neobanks and fintech startups gain scale and distribution in the critical Asia market?"

Healthy competition

In Singapore, the Monetary Authority made the choice to issue new licenses following a similar move by it's Hong Kong counterpart. The two island nations have long been competitors for Asia's financial crown, and this healthy competition is often at the forefront of innovation. As the trend amongst young new bankers in Asia begins a focal shift to online services, traditional banks in the region are making moves to keep up. This past June saw banking giant HSBC launch its PayMe digital wallet in response to local challengers Alibaba and Tencent receiving digital banking licenses.

Speaking to the Financial Times, Citi analyst Ronit GHOSE noted the relevance of the changing landscape:


“It is our view that the new virtual banks are a major threat to HSBC’s profitability in the medium to long term."

He believes HSBC would need to significantly increase its technology budget to compete with more innovative startups.

However, not everyone is afraid of the issuance of new digital banking licenses, with a spokesperson from Singapore's United Overseas Bank telling CNBC that the bank “welcomes the diversity” that the change may bring.



Read the best crypto news analysis here! bitnewstoday.com Bitcoin, investments, regulation and other cryptocurrencies
Found a mistake? Select the text and press CTRL+ENTER
Leave a comment
Leave a comment
Report a mistake