According to a recent report published by Allied Market Research, titled, “Online Banking Market by Service Type and Banking Type: Opportunity Analysis and Industry Forecast, 2020-2027,” The global online banking market size was valued at $11.43 billion in 2019, and is projected to reach $31.81 billion by 2027, growing at a CAGR of 13.6% from 2020 to 2027.
Online banking is an electronic payment system, which enables digitization of all traditional banking activities & programs such as money deposits, withdrawals, transfers, savings account management, application for financial products, loan management, bill payments, and other account services. Increase in preference of digitization & automation and rise in internet penetration & smartphone usage drive the growth of the online banking market. In addition, security issues & privacy concerns among consumers and technicality issues arising while availing transaction & processing services are a few factors that hamper the market growth.
On the basis of banking type, the retail banking segment dominated the online banking market in 2019, and is projected to maintain its dominance during the forecast period. Banks are initiating partnerships, executing business models, providing personalized offerings, and enhancing their digital channels to the retail customers. Therefore, retail banking is continuing to rise by providing better customer service & seamless user experience, which is becoming a major trend in the market.
By region, the global online banking market was dominated by North America in 2019, and is expected to maintain this trend during the forecast period. In addition, advancements in information technology and increased development of interactive & consumer-friendly user interface of websites and applications drive the growth of the online banking market in the region.
With an unprecedented spread of the COVID-19 health crisis, the online banking industry has experienced growth in revenue, owing to massive demand for online banking services to curb the spread of the coronavirus. Moreover, most of the first-time users are switching from traditional services to online services, which has become a major trend in the market. Furthermore, the market is expected to grow at a significant growth rate during the forecast period.
Key findings of the study
- By banking type, the retail banking segment led the online banking market size in terms of revenue in 2019.
- By service type, the payments segment accounted for the highest online banking market share in 2019.
- By region, North America generated the highest revenue in 2019.
The key players profiled in the online banking market analysis are ACI Worldwide, Inc., Capital Banking Solution, CGI Inc., COR Financial Solutions Limited, EdgeVerve Systems Limited, Fiserv, Inc., Microsoft, Oracle, Tata Consultancy Services Limited, and Temenos Headquarters SA. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.