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Analysis on the current situation and development prospect of Digital Banking Industry in 2022

What is the market prospect of the digital banking industry? It is reported that different from traditional banks, digital banks no longer rely on the physical branch network whether they set up branches or not, but take the digital network as the core of the bank and provide online financial services for customers with the help of cutting-edge technology. The services tend to be customized and interactive, and the banking structure tends to be flat. With the influx of a large number of funds, rapid customer growth and international expansion have become the main strategic objectives. The COVID-19 in 2020 has accelerated the development of Digital Banking.

 Analysis on the current situation and development prospect of Digital Banking Industry in 2022

According to the Global Digital Banking Research Report 2022, the number of global digital banks reached 256 in 2020, an increase of more than four times compared with that in 2018 (60), and the market size was $34.77 billion. It is expected to grow at a compound growth rate of 47.7%, reaching $722.6 billion by 2028.

In terms of geographical distribution, Europe, as the birthplace of digital banks, dominates the entire market, with 111 digital banks, accounting for more than 40% of the world, including 37 in Britain alone. About 50 digital banks have emerged in Latin America. China's digital banking development path is relatively unique, expanding from the field of payment to the field of consumer credit and other financial products. The huge differences in the development of Digital Banking among countries on the one hand show the different levels of innovation in different countries, on the other hand, it is also the result of different market opportunities left by traditional banks.

In the second quarter of 2021, the eight branches of fintech received sufficient financial support, including payment, Digital Banking, digital credit, wealth management, insurance, financial infrastructure construction, small and medium-sized enterprise services and real estate. Among them, digital banking is the most popular.

According to the statistical analysis of Zhongyan Puhua Research Report "2022-2026 version of the state-owned bank Industrial Park positioning planning and investment promotion strategy consulting report", the following is shown:

In the post epidemic era, the digitalization of China's banking industry is surging. On the one hand, the digital transformation and upgrading of traditional commercial banks has accelerated. This can be seen from the changes in bank outlets. In addition to the continuous contraction of the number of offline outlets for many years, more and more outlets have been digitally transformed, the basic business is more dependent on intelligent terminals, and the outlet staff are more concerned about customer service and experience.

On the other hand, new banking institutions represented by digital banks are also becoming more active. Mainland China, Hong Kong, Taiwan and other places have issued corresponding licenses for online Internet banking, virtual banking and Digital Banking, trying to explore new types of banks.

The core purpose of Digital Banking transformation is to help banks improve their business systems and integrate business data, so as to provide better user services. In order to achieve this core purpose, banks need to carry out digital upgrading from the three dimensions of system support, data management and user perception, and carry out corresponding business system upgrading, data management transformation and smart channel construction.

Data show that the total scale of technology investment in China's banking industry reached 207.8 billion yuan in 2020. It is expected that the growth rate will remain at about 20% in the future, reaching 432.8 billion yuan in 2024.

The Bank continues to increase its procurement of cutting-edge technologies, enrich their types, and gradually adjust the investment structure: Currently, cloud computing, AI and big data are key areas; Blockchain, rpa/ipa, digital medium platform and other technologies are expected to further increase their proportion.