New Report by WeBank and Oliver Wyman Reveals Development and Innovation Trends of Global Digital Banks
WeBank and Oliver Wyman have released a report on global digital banking trends. Key findings include:
- By end of 2023, there were 235 licensed digital banks globally, with over 300 offering broader digital banking services
- Digital banks are exploring sustainable business models, diversified revenue streams, ecosystem resources, multi-market operations, and technological innovation
- Two effective business models have emerged: retail-driven for large populations and niche-focused for smaller markets
- Digital banks are leveraging unique ecosystem resources and expanding across multiple markets
- They play a important role in data infrastructure development and industry innovation
- Digital banks are now seen as 'catfish' promoting healthy competition rather than disruptors
- Leading digital banks have achieved economies of scale and strong profitability
The report predicts widening gaps between industry leaders and followers, with potential for establishing industry standards.
WeBank e Oliver Wyman hanno pubblicato un rapporto sulle tendenze globali della banca digitale. I risultati principali includono:
- Entro la fine del 2023, c'erano 235 banche digitali autorizzate globalmente, con oltre 300 che offrono servizi bancari digitali più ampi.
- Le banche digitali stanno esplorando modelli di business sostenibili, fonti di reddito diversificate, risorse ecosistemiche, operazioni su più mercati e innovazione tecnologica.
- Due modelli di business efficaci sono emersi: orientato al retail per grandi popolazioni e focalizzato su nicchie per mercati più piccoli.
- Le banche digitali stanno sfruttando risorse ecosistemiche uniche e si stanno espandendo in più mercati.
- Giocano un ruolo importante nello
e nell'innovazione del settore. - Le banche digitali sono ora viste come 'pesci gatto' che promuovono una concorrenza sana piuttosto che come distruttrici.
- Le principali banche digitali hanno raggiunto economies of scale e forte redditività.
Il rapporto prevede un allargamento dei divari tra i leader del settore e i follower, con la possibilità di stabilire standard di settore.
WeBank y Oliver Wyman han publicado un informe sobre las tendencias globales de la banca digital. Los hallazgos clave incluyen:
- Para finales de 2023, había 235 bancos digitales autorizados a nivel mundial, con más de 300 que ofrecen servicios bancarios digitales más amplios.
- Los bancos digitales están explorando modelos de negocio sostenibles, flujos de ingresos diversificados, recursos de ecosistemas, operaciones en múltiples mercados e innovación tecnológica.
- Han surgido dos modelos de negocio efectivos: impulsados por el retail para grandes poblaciones y enfocados en nichos para mercados más pequeños.
- Los bancos digitales están aprovechando recursos ecosistémicos únicos y expandiéndose a través de múltiples mercados.
- Desempeñan un papel importante en el desarrollo de la infraestructura de datos y la innovación del sector.
- Los bancos digitales ahora son vistos como 'pez gato' que promueve la competencia saludable en lugar de como disruptores.
- Los principales bancos digitales han alcanzado economías de escala y una fuerte rentabilidad.
El informe prevé un aumento de las brechas entre los líderes de la industria y los seguidores, con la posibilidad de establecer estándares de la industria.
WeBank와 Oliver Wyman은 글로벌 디지털 은행 트렌드에 대한 보고서를 발표했습니다. 주요 발견 사항은 다음과 같습니다:
- 2023년 말까지 전 세계적으로 235개의 허가된 디지털 은행이 있었으며, 300개 이상의 은행이 보다 광범위한 디지털 은행 서비스를 제공하고 있습니다.
- 디지털 은행은 지속 가능한 비즈니스 모델, 다양한 수익원, 생태계 자원, 다중 시장 운영 및 기술 혁신을 탐색하고 있습니다.
- 효과적인 두 가지 비즈니스 모델이 등장했습니다: 대규모 인구를 위한 소매 중심 모델과 소규모 시장을 위한 틈새 중심 모델.
- 디지털 은행은 독창적인 생태계 자원을 활용하고 여러 시장으로 확장하고 있습니다.
- 그들은 데이터 인프라 개발과 산업 혁신에서 중요한 역할을 합니다.
- 디지털 은행은 이제 '메기'로서 건강한 경쟁을 촉진하는 역할으로 인식되며 파괴자가 아닙니다.
- 주요 디지털 은행들은 규모의 경제 및 강력한 수익성을 달성했습니다.
보고서는 업계 리더와 추종자 간의 격차가 확대될 것으로 예측하며 산업 표준 수립 가능성을 제시합니다.
WeBank et Oliver Wyman ont publié un rapport sur les tendances bancaires numériques mondiales. Les principales conclusions comprennent :
- À la fin de 2023, il y avait 235 banques numériques licenciées dans le monde, avec plus de 300 offrant des services bancaires numériques plus larges.
- Les banques numériques explorent des modèles commerciaux durables, des sources de revenus diversifiées, des ressources d'écosystème, des opérations sur plusieurs marchés et l'innovation technologique.
- Deux modèles commerciaux efficaces ont émergé : orienté vers le détail pour de grandes populations et axé sur les niches pour des marchés plus petits.
- Les banques numériques tirent parti de ressources d'écosystème uniques et s'étendent sur plusieurs marchés.
- Ils jouent un rôle important dans le développement de l'infrastructure des données et l'innovation de l'industrie.
- Les banques numériques sont maintenant vues comme 'silures' qui favorisent une concurrence saine plutôt que comme des perturbateurs.
- Les principales banques numériques ont atteint des économies d'échelle et une forte rentabilité.
Le rapport prévoit des écarts croissants entre les leaders du secteur et les suiveurs, avec la possibilité d'établir des normes industrielles.
WeBank und Oliver Wyman haben einen Bericht über globale Trends im digitalen Banking veröffentlicht. Die wichtigsten Ergebnisse umfassen:
- Bis Ende 2023 gab es weltweit 235 lizenzierte digitale Banken, wobei mehr als 300 umfassendere digitale Bankdienstleistungen anbieten.
- Digitale Banken erkunden nachhaltige Geschäftsmodelle, diversifizierte Einnahmequellen, Ökosystemressourcen, Multi-Markt-Operationen und technologische Innovation.
- Es haben sich zwei effektive Geschäftsmodelle herausgebildet: ein auf den Einzelhandel ausgerichtetes Modell für große Bevölkerungen und ein nischenorientiertes Modell für kleinere Märkte.
- Digitale Banken nutzen einzigartige Ökosystemressourcen und expandieren in mehrere Märkte.
- Sie spielen eine wichtige Rolle in der Entwicklung der Dateninfrastruktur und der Innovation der Branche.
- Digitale Banken werden nun als 'Wels', der gesunde Konkurrenz fördert, und nicht mehr als Störer wahrgenommen.
- Führende digitale Banken haben Skaleneffekte und hohe Rentabilität erreicht.
Der Bericht sagt eine zunehmende Kluft zwischen Branchenführern und Nachfolgern voraus, mit der Möglichkeit, Branchenstandards zu etablieren.
- Global count of licensed digital banks reached 235 by end of 2023
- Many leading digital banks have achieved commercial success in terms of business scale and profitability
- Digital banks are exploring sustainable business models and diversified revenue streams
- Some digital banks have developed their own super applications integrating financial services
- Digital banks are facilitating the development of data infrastructure and driving industry innovation
- Leading digital banks have reached economies of scale and strong profitability
- Gaps between leaders and followers are expected to widen in terms of profitability, market coverage, and influence
- Chinese digital banks will face increasing challenges as global peers accelerate their growth
According to the report, the number of digital banks has significantly increased over the past decade, driven by technological advancements and the need for financial inclusion. By the end of 2023, the global count of licensed digital banks had reached 235, while the number of players offering broader digital banking services had already exceeded 300. Among them, many leading global players have achieved commercial success in terms of business scale and profitability, thereby driving innovation and fostering a more dynamic financial services industry.
Exhibit 1: Number of licensed digital banks worldwide
2014 - 2023
Note: Only includes institutions that have obtained banking licenses from national regulatory authorities or have special "virtual bank" licenses
Source: The respective financial regulators of various countries and regions
THE DEVELOPMENT OF GLOBAL DIGITAL BANKS REVEALS COMMONALITIES
Digital banks started to emerge worldwide between 2009 and 2014. With fintech advancements and regulatory support, digital banking initially developed in
The development of digital banks worldwide varies significantly due to the different circumstances of their home markets, resource endowments, and business choices. The report highlights that in recent years, global digital banks have been exploring sustainable business models, diversified business lines, unique ecosystem resources, multi-market operations, and innovation in technological and data infrastructure. According to the report, these five themes are key factors that will widen the gap between industry leaders and followers.
Global digital banks strive to establish sustainable business models and diversify their revenue streams to meet the unique needs of their customers. Currently, there are two types of business models that have proven to be commercially effective. In markets with large populations, digital banks typically adopt a retail-driven model, focusing on serving a broad customer base. As digital banks acquire a significant user base, they can leverage technology to enhance operational efficiency and thus increase profitability. In markets with smaller populations, digital banks tend to concentrate on specific niche customer groups or sectors with high potential returns, such as small and medium enterprises (SMEs) and the auto financing sector.
These models enable digital banks to navigate diverse market environments, enhance customer experience, and improve operational efficiency through innovation and technology.
Furthermore, many digital banks have been exploring diversified revenue streams. They offer Banking-as-a-Service solutions, monetize their in-house technological capabilities, and provide non-financial services to SMEs. These initiatives have contributed to improved profitability and enhanced valuation for digital banks in the capital markets.
Global digital banks have been capitalizing on the unique resources within their ecosystems and expanding their operations across multiple markets. By embedding their services within a specific ecosystem, digital banks can offer customers seamless user experience. Additionally, they can leverage alternative data within the ecosystem to enhance customer acquisition, product pricing, and risk management while ensuring compliance.
Digital banks, with diverse backgrounds and available resources, employ different strategies when leveraging their respective ecosystems. Some digital banks develop their own super applications that integrate their financial services, creating an ecosystem that offers comprehensive solutions for customers. On the other hand, digital banks that have transformed from traditional banks aim to capitalize on the resources accumulated by the incumbents. They collaborate with external partners and share ecosystem resources to enhance their offerings.
Global digital banks are dedicated to facilitating the development of data infrastructure and driving industry innovation. They not only play a crucial role in the circulation of data but also act as facilitators and promoters, driving the circulation and sharing of data elements to build a robust data ecosystem. By actively participating in the circulation and sharing of data, digital banks can fuel their own growth and have a broader positive impact on the development of financial infrastructure.
DIGITAL BANKS WILL CONTINUE TO DRIVE INNOVATION AND COMPETITION IN THE FINANCIAL SERVICES INDUSTRY
When digital banks first emerged, they were often perceived as "challengers" or "disruptors" in the banking industry. However, as their business models prove to be effective and regulations mature, digital banks are now being seen as "catfish" for healthy competition instead. They are being introduced into the local banking system to motivate incumbents and improve the overall performance of the industry.
Leading digital banks have already reached economies of scale and strong profitability, according to the report. In the coming years, gaps between leaders and followers are expected to widen in terms of profitability, market coverage, and influence over industry standards, which may be gradually established. The technical standards and risk management models of leading players could be adopted as common industry standards, promoting the consistency and overall development of the digital banking sector.
As a result, there will be different challenges for digital banks worldwide. For Chinese digital banks, they will face increasing challenges as global peers accelerate their own growth. The next focus for Chinese digital banks will be addressing the challenges posed by new technologies, new standards, and new models from digital banks in other regions, as well as expanding their services to a broader market.
Arthur Wang, Chief Financial Officer and Secretary of the Board of Directors of WeBank, said: "As the first digital bank in
Hang Qian, Partner and the Head of Oliver Wyman's Financial Services Greater China added: "As technologies such as artificial intelligence, Web 3.0, the Internet of Things, and the metaverse continue to advance, the digital banking industry will witness ongoing innovation in applications, products, and services. The emergence of new technologies will further drive the evolution of digital banks' structure and operations, ultimately increasing the industry's overall value. The boundaries between traditional and digital banks will gradually blur as these innovations reshape the global banking industry, bringing new momentum to its development and transformation."
About WeBank
Launched in 2014, WeBank Co., Ltd. ("WeBank") is the first digital bank in China. WeBank provides convenient financial services to micro-, small- and medium-sized enterprises (MSMEs) and the public, and continuously improves the quality of services in response to customers' specific needs. WeBank now ranks 255 in the Top 1000 World Banks by The Banker.
WeBank focuses on innovation and technology. WeBank has maintained its proportion of technical personnel above
About Oliver Wyman
Oliver Wyman, a business of Marsh McLennan (NYSE: MMC), is a management consulting firm combining deep industry knowledge with specialized expertise to help clients optimize their business, improve operations and accelerate performance. Marsh McLennan is a global leader in risk, strategy and people, advising clients in 130 countries across four businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. With annual revenue of
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SOURCE WeBank Co. Ltd.
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