Report: Digital banks lead world economy’s digital ‎transformation

The Covid-19 crisis and its repercussions highlighted the need and the utmost importance of digital transformation in the economies of the world and what the next stage requires of flexibility to facilitate business in all fields, and the banking sector has become the common and essential factor in leading the transformation so that digital banks become the main pillar of any digital economy.

With the successive developments in the field of technology, digital banks have become one of the most important sectors that require moving forward in strengthening their role to provide competitive products and services, mainly through digital channels, to keep pace with all the changes taking place in the world and the shift towards new opportunities that depend on technology in all business fields in the global market.

As a result of the significant correlation between the shift towards the digital economy and the activation of the digital banking system in any economy, the data indicates that the major digital economies globally were directly linked to the size and strength of the digital banks in them. Among the 20 licensed digital banks in the world, the top 10 banks acquire 44 % of the value of its assets at a value of $ 270.1 billion, led by the Japanese Bank Rekuten with a value of assets of $ 58.7 billion, as the Japanese economy, and then the Chinese economy, is one of the largest economies in the world in digital transformation.

The Chinese WeBank comes in second place with assets of $53.1 billion, then the Chinese MyBank in third place with assets of $47.7 billion, followed by the Japanese Sony Bank in fourth place with assets of $32.9 billion, then Kakao Bank The South Korean is in fifth place, with assets of $ 24.5 billion

The importance of digital banks in any digital economy lies in the fact that they help manage time and reduce the effort that a customer might spend visiting commercial banks, which reduces the burden on customers. ,

At the bank level, technical substitution instead of human resources contributes to reducing errors and raising returns and profits, in addition to the ease and flexibility of banking transactions and their availability around the clock.

Digital banks are also considered environmentally friendly as they help reduce traffic congestion and provide buildings and office equipment. According to the World Bank, accelerating the pace of transformation towards a digital economy requires prioritizing the necessary reforms to increase the use of digital payments and increase the role of digital banks.

World Bank data indicate that the full digitization of the economy in the Middle East region can raise per capita GDP by no less than 46% over 30 years.

Digital banks provide banking services and operations via the Internet electronically (remotely), and the procedures do not require a review of any branch, as they operate like commercial banks, but through the Internet in an integrated manner, and therefore the primary goal of digital banks is to facilitate banking operations and services for customers. In an efficient and flexible way that makes it easier for customers to terminate their services at any time they wish.

In the Kingdom, all conditions have been created for the launch of digital banks, which aim to keep pace with the latest developments in the financial and technical sector, to achieve the goals of the financial sector development program and Vision 2030 through the development of the digital economy, in light of the strong basic infrastructure of the communications sector in the Kingdom and the progress The world’s largest…

It is noteworthy that last year the Council of Ministers issued a decision approving the licensing of two local digital banks by transferring stc pay to stc bank to become a local digital bank to conduct banking business in the Kingdom with a capital of 2.5 billion riyals, in addition to the Saudi Digital Bank with a capital 1.5 billion riyals.