Author: Chi Vo - Content Writer After the pandemic, the banking industry has drastically shifted from physical banking to digital technologies. With the rise of new technologies, digital banking has become the bee's knees for consumers all over the world. As the use of mobile devices continues to skyrocket, banks have had to up their game and pivot towards digital services to keep up with changing customer behavior. In this blog, we will take a closer look at the past and current status of global digital banking, the catalysts that are fostering its growth, and forecast the digital banking trends of 2023. We will also explore how small, medium, and large businesses can benefit from these trends in digital banking. So fasten your seatbelts, and let’s explore the future of digital banking together!
The growth of digital banking has been impressive over the last few years. According to a report by Statista, the number of people using digital banking services is expected to reach 216.8 million by 2025, up from 203 million in 2022. In 2021, the global digital banking market was valued at $20.8 billion, and it is projected to grow at a CAGR of 20.5% from 2022 to 2030.
One of the main catalysts for digital banking growth is the rise of mobile devices. According to a report by Statista (Feb 2023), the current number of smartphone users globally is 6.92 billion, which means that 86.34 percent of the world's population owns a smartphone. This has led to an increase in mobile banking, as consumers are now able to access banking services through their mobile devices.
The COVID-19 pandemic has also accelerated the adoption of digital banking. With lockdowns and social distancing measures in place, consumers have turned to online banking services. According to a report by McKinsey, the pandemic has accelerated the digitization of banking by as much as three years.
Another factor driving digital banking growth is changing consumer behavior. Customers are now more inclined to use digital banking services after the pandemic. According to a report by Deloitte, 49% of customers now prefer digital channels for banking. This shift in behavior has prompted banks to adapt their services to meet the needs of customers.
To quantitatively forecast digital banking trends in 2023, we will conduct a time series analysis. Time series analysis is a statistical technique that is used to analyze trends over time. By analyzing past and current market scenarios, we can make some predictions about the direction digital banking will take over the next few years.
One of the trends in digital banking that we can expect to see in 2023 is the rise of mobile payments. According to a report by Grand View Research, the global mobile payments market is expected to reach $4.5 trillion by 2023, growing at a CAGR of 33.8% from 2020 to 2027. This is a significant increase from the market size in 2019, which was estimated at $1.4 trillion. This growth can be attributed to the increasing adoption of mobile devices and the convenience of mobile payments.
The growth of the mobile payments market presents numerous opportunities for businesses of all sizes. For small businesses, mobile payments can provide a cost-effective way to accept payments from customers without the need for expensive point-of-sale systems. This can help to reduce transaction costs and improve cash flow. In addition, mobile payments can provide a competitive advantage for small businesses, as customers increasingly expect to be able to pay using their mobile devices.
For larger businesses, mobile payments can help to improve customer engagement and loyalty. By offering a convenient and easy-to-use mobile payment option, businesses can provide a better customer experience and build stronger relationships with their customers. In addition, mobile payments can provide businesses with valuable data on customer behavior and preferences, which can be used to improve marketing strategies and product development.
Moreover, mobile payments can also help businesses to expand their reach into new markets. By offering mobile payment options, businesses can more easily reach customers in areas where traditional banking services are less accessible or less prevalent. This can help to improve financial inclusion and support economic development.