Share

$8 trn is the 2021 volume of global digital banking and financial services

Digital banking market will reach $30.1 billion in 2026
$8 trn is the 2021 volume of global digital banking and financial services
Digital banking

The volume of digital banking and financial services globally exceeded $8 trillion during 2021, with estimates that this volume will exceed $10 trillion by 2027.

This is what was revealed by the Director General and Chairman of the Board of Directors of the Arab Monetary Fund, Dr. Abdul Rahman bin Abdullah Al-Hamidi, during the opening of the work of a remote workshop on “Digital Banks: Opportunities, Challenges and Associated Regulatory Frameworks.”

Al-Hamidi said that the size of the digital banking market was estimated at more than $12.1 billion in 2020, and is expected to rise to about $30.1 billion by 2026. He pointed out that digital banks represent new business models that serve to enhance financial inclusion, as they contribute to the development of banking services, digital finance and banking.

He explained that financial innovation has allowed new business models related to receiving deposits, credit brokerage and raising capital, pointing out that digital banking services have provided new opportunities to reach customers from the less fortunate groups, or the unbanked, and provide them with appropriate financial services at reasonable prices.

Al-Hamidi pointed out that many banks in the world are working to develop digital banking services, including the transition to establishing digital banks.

He also pointed out that a number of central banks have encouraged this trend for several reasons, the most important of which are: keeping pace with digital financial developments, developing services more responsive to customers’ needs, increasing financial inclusion rates, in addition to the possibility of monitoring funds that take place in terms of reception or transfer within the banking sector in a better way, and instantaneously.

Challenges

 

According to Al-Hamidi, digital banking services face many challenges, the most important of which is the expansion of the scope of their work and the maturity of the technologies used, in addition to the governing legislative and regulatory frameworks.

“It has become imperative for the partnership and cooperation between digital banking service providers from modern financial technology companies, data participants and traditional financial institutions to reach peak model that achieves the interests of both customers and institutions, in addition to the opportunity for the supervisory authorities to work to adapt and address these challenges while also developing appropriate legislative and regulatory frameworks to provide digital banking services,” Al-Hamidi said.

It is noteworthy that the workshop was held with the participation of representatives from central banks, banks and financial institutions in various Arab countries.

The stories on our website are intended for informational purposes only. Those with finance, investment, tax or legal content are not to be taken as financial advice or recommendation. Refer to our full disclaimer policy here.