World digital economy grows by 21% annually…Digital banks ‎lead the transformation

The digital payments sector and the banking sector formed two main pillars in the transformation that the world has witnessed in recent years towards the digital economy, whose most prominent features were the establishment of digital payments companies and integrated digital banks, which has become a necessary global trend in light of the rapid development witnessed in the field of Financial technology and the intensification of competition facing the banking sector, especially from non-banking institutions

In light of the challenges the world is facing as a result of the Corona pandemic, the global pace has accelerated towards the expansion of the digital economy. According to the World Bank, the full digitization of the economy can raise the per capita GDP by no less than 46% over a period of time. 30 years, or in terms of dollar value for long-term gains of no less than $1.6 trillion.

According to the latest estimates, the size of the global digital transformation market is expected to grow at a compound annual growth rate of 21.1% until 2027, to reach about $1.55 trillion, compared to $594.5 billion in 2022, where the main elements driving this market are: In increasing spending by governments and the private sector, and competition in marketing and providing services

The digital economy enables citizens to use information and communication technology as an effective tool to serve the local community in its various categories, with a focus on rural and remote communities with the aim of bridging the digital gap between different regions in one country, developing human resources and equipping them with modern economy skills to increase their competitiveness in obtaining jobs and improve their efficiency.

The effects of the digital economy are reflected in the integration of efforts to achieve comprehensive economic and social development at the level of population groups, which leads to a reflection of its direct effects on the life and well-being of citizens, and the upgrading of banking sector business models and the nature and quality of financial and banking services and the mechanisms for providing them in accordance with the current development, which drives them. Towards more sustainable growth and innovation

Digital banks constitute a new revolution in the banking sector in the countries of the developed world, as the benefits of these banks multiply, not only at the level of customers, but also beyond that, as the benefit accrues to financial and banking institutions as well, and this is done by reducing cost, effort and time, In addition to improving its operational efficiency, organization and raising its quality, in addition to simplifying procedures when providing services to customers, and at the same time it can provide opportunities to provide innovative and creative products that contribute to spreading a state of satisfaction and acceptance among the public towards services and products, and also help to expand And spread and reach the largest segment of the audience and attract more targeted customers locally, regionally and internationally.

The presence of digital banks also leads to an increase in the number of banking service providers within any country, which is reflected in increased competitiveness and a decrease in concentration, and ultimately is in the interest of customers, in addition to the efforts of digital banks to provide an advanced segment of banking services and products that suit a wider segment of customers and meeting their growing needs, which will have a major role in increasing financial inclusion, especially among young people who are more interested in digital services.

A digital bank is defined as a bank that provides all its banking services through an electronic platform through the Internet, so that bank customers can access banking products and services through an electronic platform, which means digitizing all banking operations and replacing the physical presence of the bank with a permanent presence via the Internet, and eliminating the need for Customer to visit a branch.

Payment companies and digital banks are working on digitizing every level of banking services, which means that they rely on artificial intelligence to automate background processes such as administrative tasks and data processing, which in turn relieves pressure on employees to complete daily tasks, and also allows users to not only perform transactions remote account deposits and transfers, but also provides users with the opportunity to more easily apply for loans and access personal money management services.

stc pay was one of the most prominent players in the field of digital payments over the past years, as it played a pivotal and unprecedented role in facilitating all financial and banking transactions, especially payments during the closing period due to the (Covid-19) pandemic, especially with the provision of many Innovative products and services such as virtual and plastic Mada and Visa cards, money transfer via smart phones and to and from local banks, as well as international money transfers through Western Union, and its provision of many services that helped facilitate the lives of users such as the “Eidiya” service. and “cat” and others. ,

It is noteworthy that the Council of Ministers agreed in June of the year 2021 to grant a license to stc pay to transform it into a digital bank with a capital of 2.5 billion riyals.