Market Trends of Digital Banking Platform Industry
This section covers the major market trends shaping the Digital Banking Platform Market according to our research experts:
Increasing Adoption of Cloud-Based Platforms to Boost the Market Growth
- In January 2023, the digital bank in the Philippines, GoTyme Bank, collaborated with the worldwide cloud banking platform Mambu to create an innovative digital banking solution that seeks to increase Filipinos' access to high-quality financial services.
- Many banks prefer cutting the IT infrastructure cost needed for on-premise setup by leveraging cloud-based services, which enable them to deploy new products and scale infrastructure quickly, cater to a broader customer base with varied needs at a faster speed, and manage rapidly increasing real-time payments while ensuring compliance and security standards.
- As a subscription fee is paid to a SaaS provider, system maintenance costs and legacy technology issues are reduced. Rather than spending a small fortune on IT, SaaS provides banks with the ability to reallocate budgets so they can focus on innovation, customer satisfaction, and business growth.
- The use of the cloud has also helped mobile banking platforms offer a responsive user interface (UI) and support the bank customers' entire banking journey, right from onboarding to transactional banking requests, on their mobile devices. Banks are rapidly adopting mobile banking platforms, owing to their changing preference toward mobile banking.
- Moreover, increased adoption of third-party applications for real-time payments, such as Whatsapp Pay and PhonePay, has led to increased demand for reliable infrastructure by the banks to carry out UPI transactions smoothly. For instance, Visa recently completed a USD 5.3 billion acquisition of Plaid, a fintech startup that allows applications to connect with customers' bank accounts easily and instantly. Technological shifts such as these have led to increased demand for cloud infrastructure in the digital banking industry.
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North America is Expected to Hold Major Share
- Many of the biggest banks are in North America, which is a big reason why the market for digital banking platforms is growing. Digital banking companies in the region offer software as a service so that legacy systems can be turned into digital ones. For instance, Temenos helps new U.S. digital banks go live in 90 days with the most functionally rich and technologically advanced front-to-back SaaS digital banking offering.
- Digital banking platforms are becoming more popular as blockchain technology, which makes security better, is used more and more, especially in the BSFI sector. This factor is fueling the market's growth in the country. Many companies are developing blockchain-based cloud digital banking platforms.
- North America is also one of the most innovative and first places to use the cloud. Cloud infrastructure providers have a strong foothold in the region, which helps the market grow even more.
- The steady rise in the use of digital banking platforms follows a similar rise in the use of fintech apps, which are notable for being one of the fastest-growing types of apps in the US. Due to the global coronavirus (COVID-19) pandemic, people in the United States stayed at home more and used their phones more. This led to more digital banking across the region.
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