How Are Digital Banking Platforms Transforming the Financial Industry?

A digital banking platform is an internet service that allows banks to offer their services over the Internet. It gives customers the benefit of controlling their financial needs anytime, anywhere. These platforms combine a wide range of services, including savings, loans, payments, and investment services, all of which are easily accessible through websites or mobile apps, thus eliminating the need for physical branches. 

These platforms offer a seamless user experience through safe transactions, easy account management, and personalized financial advice. Due to the widespread use of internet connectivity on smartphones, digital banking platforms have transformed the way customers interact with banks, resulting in faster and more accessible services. 

Moreover, these platforms utilize advanced technologies such as artificial intelligence, data analytics and cloud computing to improve security, prevent fraud, and deliver more personalized services. In response to evolving expectations of customers, digital banking platforms play an important role in helping financial institutions remain competitive and meet the growing demand for more efficient and innovative banking solutions. 

As per the market analysis by Allied Market Research, the global digital banking platform market is anticipated to exhibit a notable CAGR of 20.9% during the forecast period. 

Innovations in digital banking through blockchain services 

Blockchain as a Service (BaaS) is a cloud-based solution that helps companies manage the blockchain network. It is a digital system used to keep secure and shared records. One popular model is Ethereum BaaS (EBaaS), developed by ConsenSys and Microsoft. EBaaS is available through Microsoft's Azure cloud platform, enabling developers to construct and manage blockchain applications. Additional services such as Cortana Analytics and CRM Online for Government (CRMOL) have also been used with EBaaS.  
 
Microsoft’s BaaS is designed to assist businesses and software developers in working on blockchain projects efficiently and affordably. The platform is scalable, allowing it to expand in line with the company's needs. In sectors such as BFSI, cloud-based solutions like BaaS are gaining importance, particularly as the demand for digital services such as mobile banking applications rises.  
 
For example, in 2023, JPMorgan Chase began incorporating blockchain technology with cloud services to enhance their payment systems, which makes transactions faster and more secure. The growing use of mobile and online payment is expected to fuel the need for cloud-based blockchain platforms. This move is predicted to drive increased adoption of digital banking platforms over the next few years. Vendors are preparing to meet this demand by creating more cloud-based solutions tailored particularly for the cryptocurrency and financial markets. 

Next Bank partners with Chunghwa Telecom for innovative financial solutions 

In January 2023, Temenos announced the successful release of Next Commercial Bank (Next Bank), a digital bank based in Taiwan with support from Chunghwa Telecom, the biggest telecom operator in the country. Next Bank is among the first digital banks to obtain a virtual banking license from Taiwan’s Financial Supervisory Commission, with the aim of simplifying financial management through inventive design and user-friendly experiences.  
 
Next Bank are able to rapidly launch products to the market and scale efficiently by using Temenos’ open banking platform. The digital bank provides a broad range of services, such as loans, deposits, cards, and a unique points program that offers customers cashback on their purchases, all managed through a mobile app. Customers have the ability to open an account in just three minutes and are able to customize their account numbers for a more personalized experience.  
 
In the future, Next Bank plans to expand its offerings to encompass foreign exchange services, remittance options for migrant workers, and wealth management tools. Using Temenos’ core banking technology, which is built on microservices and can be accessed through APIs, Next Bank seeks to innovate quickly and sustainably, with the goal of acquiring nearly 300,000 customers within nine months of its launch. 

Winding up  
 
Digital banking platforms are changing existing financial management practices by offering services over the Internet. The upsurge in the need for digital innovation creates opportunities for inventions like cloud and blockchain technologies. These advancements have improved security, increased productivity, and enhanced customer satisfaction, all of which are essential for growth in the financial sector.