Besides building ecosystem partnerships, banks have to balance between convenience and data privacy and risk control, on alternative data usage. Also, BNPL poses a threat to banks’ growth, if banks do not undertake concrete actions on partnerships and product development. Moreover, next-generation digital banks will break through in invisible banking, hyper-personalisation, block-chain secured transactions, and 3-D virtual banking.
This report comes in PPT.
The current generation of digital banks are mostly mobile only (first), eliminating the need to visit branches. However, they are still not intelligent enough, while data is underutilised.
Next-gen digital banks will have the characteristics of invisible banking, hyper-personalisation, block-chain secured transactions, and 3-D virtual banking backed by 5G/6G.
Most of the digital banks in the region mainly focus on products and services for young individuals. Joint saving goals, mortgages and children’s insurance can be differentiating areas.
Also, key markets including Japan and China show ageing trends. Wealth and retirement planning by remote advisory should be on the roadmap, to grow with customers aged 40+.
Despite digital banks offering great convenience from account opening to ecosystem usage, some consumers, especially elderly ones, are still sceptical about security and privacy.
How to address their concerns on data security control and data sharing will be valuable to drive application and usage of digital banks.
BNPL has shown faster growth compared with other lending products, benefiting the rise of players such as Atome. Commercial banks may share the pie of market growth, by prudent assessment and partnership with BNPL firms.
Regulatory development also has to be accelerated to enable banks with similar offerings to compete fairly with BNPL firms.
This is the aggregation of ATM, charge, credit, debit, e-purse and retail cards. Note that smart cards are not included in financial cards.
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