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Digital Banking Transformation Gains New Momentum

In the recent past, banking relationships have traditionally been at the epicenter of the consumer economy. Banks have also been important due to their risk absorption functions for businesses and their value in helping to shape public policies.

However, with new fintech startups disrupting the relationship between customers and their financial institutions, legacy banks are now required to evolve and adapt their business model much faster.

As progressive government policies eroded the barriers of entry for service introductions by fintech players, several forms of traditional banking transformation have accelerated in demand and growth.

Online Financial Services Market Development

According to the latest worldwide market study by Juniper Research, 53 percent of the world’s population will access digital banking services in 2026 -- reaching over 4.2 billion digital banking users, that's up from 2.5 billion in 2021.

The research study identified an increase in digital transformation efforts that enabled banks to function effectively during the global COVID-19 pandemic. These efforts justified the benefits of digital banking use cases and fostered additional applications growth.

The new study findings also identified that China will be the largest digital banking market over the next 5 years -- accounting for almost 25 percent of digital banking users in 2026.


Juniper analysts, therefore, recommend that banks should integrate their many offerings into a single, consistent online experience, to better compete with the diverse fintech startup competition.

Juniper Research analyzed thirty leading Tier 1 banks for their innovation in terms of digital features, digital investment, and online innovation. Analysts also assessed their agility in terms of size, profitability, and brand strength, in order to evaluate their digital transformation readiness.

As a result of their ongoing assessment, Juniper Research identified the leading group of banks for digital transformation: Bank of America, HSBC, JPMorgan Chase, BBVA and DBS Bank.

Bank of America offers an ever-expanding digital platform, including the Erica chatbot, and has had recorded significant upticks in digital usage and engagement during the pandemic.

JPMorgan Chase has experimented with blockchain and has made acquisitions, such as that of wealth manager Nutmeg in the UK to boost its offerings.

HSBC has launched innovative new solutions, such as HSBC Kinetic for small businesses in the UK, with BBVA launching initiatives including cryptocurrency trading and DBS Bank having high levels of digital engagement.

Outlook for Digital Transformation Project Growth

"These banks have progressed with well-planned and executed digital transformation strategies, and other banks need to build similarly broad and revolutionary roadmaps, or they will be left behind by more agile competitors," said Damla Sat, industry analyst at Juniper Research.

That said, I believe in addition to enhancing the customer experience online, more financial services organizations will refocus staff roles and transform their employee experience as more inquiries and transactions are automated or processed by artificial intelligence.

I also anticipate that legacy bank CIOs and CTOs will develop strategies and programs to rearchitect and reengineer their networking and IT infrastructure to accommodate the distributed workforce phenomena.

Moreover, as more banks adopt flexible working models across the globe, employee demand for secure access to enterprise software and SaaS applications from anywhere will grow rapidly. Financial services digital transformation will positively impact both customers and employees. That's meaningful progress.

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