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Analysis of the Current Situation and Development Prospects of the Digital Banking Industry in 2022

What is the market outlook for the digital banking industry? It is reported that unlike traditional banks, digital banks no longer rely on physical branch networks regardless of whether they have established branches. Instead, they use digital networks as the core of the bank, leveraging cutting-edge technology to provide customers with online financial services. Services tend to be customized and interactive, and the bank structure tends to be flattened. With the influx of a large amount of funds, rapid customer growth and international expansion have become the main strategic goals. The COVID-19 in 2020 has accelerated the development of digital banks.

Analysis of the Current Situation and Development Prospects of the 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 to 2018 (60), with a market size of 34.77 billion US dollars. It is expected to grow at a compound annual growth rate of 47.7% and reach 722.6 billion US dollars by 2028.

From a regional distribution perspective, Europe, as the birthplace of digital banks, has led the entire market, with 111 digital banks, accounting for over 40% of the world's total, including 37 in the UK alone. About 50 digital banks have emerged in Latin America. The development path of digital banking in China is relatively unique, expanding from the payment field to the consumer credit and other financial product fields. The huge differences in the development of digital banking among countries not only reflect the varying levels of innovation in different countries, but also result from the diverse market opportunities left by traditional banks.

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

According to the research report "2022-2026 State owned Bank Industrial Park Positioning Planning and Investment Promotion Strategy Consulting Report" by Zhongyan Puhua, statistical analysis shows that:

In the post pandemic era, the digital wave of China's banking industry is surging. On the one hand, the digital transformation and upgrading of traditional commercial banks are accelerating. This can be seen from the changes in bank branches. In addition to the continuous decline in the number of offline branches for many years, more and more branches have undergone digital transformation, with basic businesses relying more on intelligent terminals, and branch employees paying more attention to customer service and experience.

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

The core purpose of digital banking transformation is to help banks improve their business systems, integrate business data, and provide better user services. In order to achieve this core goal, banks need to carry out digital upgrades from three dimensions: system support, data management, and user perception, and carry out corresponding business system upgrades, data management transformation, and smart channel construction work.

Data shows that the total scale of technology investment in China's banking industry reached 207.8 billion yuan in 2020. It is expected to maintain a growth rate of around 20% in the future, reaching 432.8 billion yuan in 2024.

Banks continue to increase their procurement efforts and diversify their types of cutting-edge technologies, gradually adjusting their investment structure. Currently, cloud computing, AI, and big data are key areas of focus; Blockchain RPA/IPA、 The proportion of technologies such as digital platforms is expected to further increase.