Digital Banks - GCC

In the GCC, the Digital Banks market market is anticipated to witness a significant increase in Net Interest Income, with a projected value of US$833.30m in 2024.
This growth is expected to continue at a compound annual growth rate (CAGR 2024-2028) of 10.58%, leading to a market volume of US$1,246.00m by 2028.
It is worth noting that in terms of global comparison, in China is expected to generate the highest Net Interest Income, reaching a substantial amount of US$969,200.0m in 2024.
The digital banking market in the GCC is rapidly expanding as consumers in countries like Saudi Arabia and the UAE embrace convenient and secure digital banking services.

Key regions: United Kingdom, Japan, China, United States, Brazil

Definition:

Digital Banks refer to the emerging market for purely digital banks that offer financial services via online and mobile platforms. Unlike traditional banks, digital banks also known as neobanks, do not have store-based branches and instead rely on technology to deliver their services. But in contrast to digital-only direct banks, which focus on providing traditional banking services in an online format, the digital banks/neobanks covered in this analysis prioritize cutting-edge features and a modern user experience.
Digital Banks offer a wide range of financial products and services, including savings and checking accounts, credit cards, personal loans, and investment products, among others. They aim to provide a more convenient, accessible, and user-friendly banking experience by leveraging technology such as mobile apps and artificial intelligence. They also provide a digital identification and onboarding process, often via smartphone.
The Digital Banks market is growing rapidly as consumers increasingly demand more convenient, digitally focused financial services. Neobanks/Digital Banks are able to offer these services at a lower cost compared to traditional banks, as they have lower overhead costs and a more efficient operating model.
However, digital banks face challenges in building trust and establishing their reputation in the financial services industry. They must also navigate the complex regulatory landscape and comply with the same rules and standards as traditional banks.
Overall, the Digital Banks market represents a growing and exciting opportunity for financial services providers to deliver innovative and convenient solutions to consumers.

Structure:

The market data comprises Net Interest Income, the value of Deposits, the value of Loans, Credit Card Interest Income as well as the number of ATMs.

Additional information:

The Banking market is highly competitive and characterized by the presence of large global players as well as regional and local banks. Banks are continually seeking ways to improve their offerings and remain competitive by leveraging technology and offering innovative financial products and services. Additionally, changes in regulations and the growing trend toward digitalization are shaping the retail and commercial banking market, creating opportunities for new entrants and forcing existing players to adapt.

Key players in this market are companies such as Bunq, Tomorrow, and Revolut.

Use the info button next to the boxes for more information on the data displayed.

Market

Region

Region comparison

Currency

Analyst Opinion

The Digital Banks market in GCC is experiencing rapid growth and evolution due to changing customer preferences, technological advancements, and unique local circumstances.

Customer preferences: Customers in the GCC region are increasingly turning to digital banks for their convenience, accessibility, and innovative services. The younger population, in particular, is driving the demand for digital banking solutions as they seek seamless and tech-savvy ways to manage their finances.

Trends in the market: In the GCC region, digital banks are focusing on personalized customer experiences, offering a wide range of services beyond traditional banking. These services include budgeting tools, investment options, and seamless cross-border transactions. Additionally, partnerships between digital banks and fintech companies are on the rise to enhance the overall customer experience.

Local special circumstances: The GCC region's unique demographics, with a large expatriate population and high smartphone penetration rates, are contributing to the rapid adoption of digital banking services. Moreover, the regulatory environment in the region is becoming more conducive to digital banking, encouraging new players to enter the market and existing banks to expand their digital offerings.

Underlying macroeconomic factors: The GCC region's drive towards economic diversification and digital transformation is fueling the growth of the digital banking sector. As governments in the region push for innovation and technology adoption, digital banks are well-positioned to capitalize on these opportunities. Additionally, the increasing competition among traditional banks and digital-only players is leading to a more dynamic and customer-centric banking landscape in the GCC.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on Net Interest Income, Bank Account Penetration rate, the value of Deposits, the number of depositors, the value of Loans, the number of borrowers, Credit Card Interest Income, the number of ATMs as well as the number of Bank Branches.

Modeling approach / Market size:

Market sizes are determined by a combined Top-Down and Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use data provided by the IMF, World Bank and the annual reports of the top 1000 Banks by asset size. Next we use relevant key market indicators and data from country-specific associations such as GDP, deposit interest rates, lending interest rates or bank account penetration rates. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, the S-curve function and exponential trend smoothing are well suited to forecast financial services for digital as well as traditional products and services.

Additional Notes:

The market is updated twice per year in case market dynamics change.