Global Online Banking Market

Online Banking Market Overveiw

The global Online Banking market is valued at USD 12.43 billion in 2021 and is projected to reach USD 32.11 billion by 2028, growing at a CAGR of 13.6% during the forecast 2022 to 2028. The growing attraction of banks to online banking is fairly obvious due to low transaction costs, easier integration of services, interactive transaction capabilities, and other advantages that increase customer lists and profit margins. Further, online banking services allow institutions to bundle more benefits into single packages, attracting customers and minimizing overhead.

What is Online Banking?

Online banking, also described as internet banking, web banking or home banking, is an electronic/digital payment method that allows customers of a bank or other financial institution to perform a range of financial marketing through the financial institution’s website. The online banking procedure will normally connect to or be part of the core banking procedure used by a bank to deliver customers access to banking services in the area of traditional branch banking. Online banking greatly decreases the banks’ operating cost by decreasing dependence on a branch network and shows greater amenity to customers in time-saving in arriving in a branch and the convenience of executing banking transactions even when branches are closed. Internet banking delivers personal and corporate banking assistance, offering elements such as viewing account balances, getting statements, checking recent trades, transferring funds between accounts, and making payments.

Growth Drivers

Convenience and more reasonable rates of interest

By delivering convenient & more comfortable alternatives to access online banking products & services, the high net interest rate is becoming the prime element for market growth. In addition, there are no branches to keep in online banking, and other operational costs are decreased eventually, which further enhances its cost efficiency in business operations. Therefore, banks provide saving opportunities with a better interest rate to their customers due to decreasing these added expenses. Furthermore, consumers use online banking without buying any software device, storage or backup data as all dealing information is stored at the bank’s terminal. Consequently, these factors make it more convenient for consumers to use online banking, thereby pushing the market growth.

Opportunities

Innovative banking services and growth in corporate investors

The rise in digitalization and expansion in corporate banking is anticipated to propel market growth. Moreover, online banking has helped investors keep real-time track of their investment portfolio while financing or trading online with constant access to their funds. Therefore, these online banking components will accelerate market growth and improve innovative banking services to augment corporate investors. Similarly, increased corporate investors and online banking services are expected to deliver lucrative opportunities to the market in the coming years.

Restraints

Lack of Internet literacy in emerging nations

Many emerging nations still lack internet literacy, hindering the wide-scale adoption of online and mobile transactions. It negatively impacts the market growth of online banking platforms. Internet literacy comprises a wide range of skills, such as reading and making sense of technical knowledge, which help individuals operate and use digital technologies. Most countries in the African region have a low internet literacy rate; therefore, individuals cannot exploit the potential of digital technologies. Technology merchants are also reluctant to make investments due to the low number of online transactions. Hence, low internet literacy in emerging countries is anticipated to restrict the growth of the online banking platforms market.

Pre Covid-19 Impact on Global Online Banking Market

Before the covid-19 period, the surge in internet users and the transformation from time-honored banking to online banking are the major factors driving the market’s growth. In addition, an expansion in the adoption of a cloud-based platform to obtain higher scalability fuels the market’s growth. Also, growth in machine learning and artificial intelligence usage in digital banking platforms, an increase in innovative banking services, and a rise in corporate investors are expected to provide lucrative opportunities for the market before the pandemic.

Covid-19 Impact on Global Online Banking Market

During the covid-19 period, in the pandemic situation, the online banking market has noticed significant growth and recorded continuous development globally. In addition, consumers have been largely satisfying banking services online via mobile phones and web browsers, owing to the global fear of the virus and maintaining social distancing. Therefore, the changing habits of consumers toward online banking services have accelerated the growth of the online banking market. Similarly, online banking experienced a positive impact during the covid-19 period.

Post Covid-19 Impact on Global Online Banking Market

After the covid-19 period, with the increase in emphasis on smartphone usage and massive internet penetration for the sake of safety, the demand for online banking is continuing to increase and is anticipated to keep its dominance in the market. In addition, customers are operating online banking more frequently as banks deliver real-time payment solutions, allowing regular banking transactions online, elements of bill payments, and others. Also, the banking industry has noticed massive growth & standardization in terms of products & services delivered via mobile application and raised brand loyalty among consumers, thereby causing the online banking market growth.

By Service Type Segmental Analysis

Based on service, the global online banking market is segmented into Payments, Processing Services, Customer & Channel Management, Wealth Management and Others. The payments feature dominated the online banking industry in 2021 and are projected to maintain dominance during the forecast period due to many consumers shifting towards online payment platforms. It delivers more convenience and time-saving features than the conventional methods of payments in the market.

By Banking Type Segmental Analysis

Based on banking type, the global online banking market is segmented into Retail Banking, Corporate Banking, and Investment Banking. The Retail Banking system to dominate the market during the forecast period. Retail banking has occurred as an essential enabler in the online banking platforms market to translate banking measures worldwide. The digital process has disrupted the marketplace with changing customer behavior and anticipations, emerging competitors, and innovative technologies. With the increasing number of media, financial institutions modify their operating processes to provide customers with premium services and enhance their account management.

By Regional Segmental Analysis

Based on region, the global online banking market is segmented into North America, Europe, Asia-Pacific, South America and The Middle East & Africa. Asia Pacific Online banking platform market is calculated to have strong augmentation in the future. The Asia Pacific is one of the fastest-growing regions in the world. With the continuous rise in technologies, there is a constant growth in the number of services in the region. The high usage of digital technologies, especially in emerging economies, such as Singapore, Australia, India, China, and Japan, has made Asia-Pacific a lucrative market in the IT industry. Strong banking credentials, including digital offerings, strong financial positions, and digital structures, are anticipated to push the growth of the online banking platforms market in the Asia-Pacific region.

Competitors Analysis

The companies include ACI WORLDWIDE, INC, Capital Banking Solution, CGI Inc., COR Financial Solution Limited, EDGEVERVE System Limited., FISERV, Inc., Microsoft, Oracle, TATA Consultancy Services Limited, Temenos Headquarters SA and other prominent players in the global online banking market. Key Stakeholders

• Market research and consulting firms
• Industry associations
• Online Banking Firms
• Local Governments
• Regulatory bodies
• Suppliers
• Retailers

Recent Development

• In September 2021, TCS (TATA Consultancy Services) established TCS BaNCS Cloud for Asset Servicing, which automates the servicing of all types of assets across all markets and targets custodians broker-dealers, asset managers, and investment and private banks.
• In August 2021, Finastra and Salt Edge partner to improve the quickness of keeping with the Payments Service Directive 2 (PSD2) and other global Open Banking standards for banks and Electronic Money Institutions (EMI) globally.
• In July 2021, Temenos and UBL declared a partnership to deliver and execute a next-generation digital banking solution. This partnership would help the digital transformation of UBL across all channels, products, and segments for its domestic and international trades.
• In April 2021, NCR and Google Cloud teamed, which would allow NCR to grow cloud availability of its digital banking software portfolio, which contains the NCR channels services for retail banking and payment processing medium.
• In July 2020, Finastra and Microsoft contracted a partnership for a multiyear cloud to accelerate the online transformation of financial services. Together, they would deliver customers, businesses, and the community solutions and services to fit customers’ needs and lives.

Scope of the Report

Report Attribute	Details
Revenue in 2021	USD 12.43 billion
The revenue forecast in 2028	USD 32.11 billion
Growth Rate	CAGR of 13.6% from 2022 to 2028.
Historical data	2017 – 2020
Base Year	2021
Forecast period	2022 – 2028
Region covered	North America, Europe, Asia-Pacific, South America, and Middle East & Africa
Key companies Profiled	The companies include ACI WORLDWIDE, INC, Capital Banking Solution, CGI Inc., COR Financial Solution Limited, EDGEVERVE System Limited., FISERV, Inc., Microsoft, Oracle, TATA Consultancy Services Limited, Temenos Headquarters SA Vendors are the key players.

Market Modelling

By Service Type

• Payments
• Processing Services
• Customer & Channel Management
• Wealth Management
• Others

By Banking Type

• Retail Banking
• Corporate Banking
• Investment Banking

By Region

• North America
• Europe
• Asia Pacific
• South America
• The Middle East & Africa

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