Personal checks and hard currency transactions are falling in popularity as digital payment methods become more widespread, according to a new analysis.
Research firm Global Industry Analysts’ new report Digital banking – global market trajectory and analytics found that cash was becoming “obsolete” as technology entered the retail banking sector.
The study surveyed 222 companies across all major geographies and covered segments such as retail banking, corporate banking, investment banking, as well as service and technology.
According to the study, personal checks and hard currency were becoming less popular, while increasing investment into financial technology solutions and the rise of cryptocurrencies were driving the cashless society.
Other factors highlighted by the report included the increasingly widespread us of chip-and-pin payment cards, smartphone payments apps, and culture and regulation changes caused by internet technology. On top of this, the Covid-19 pandemic has also increased the drive for contactless and digital payments.
With all these factors acting as tailwinds for the digital banking sector, the global market is expected to grow from an estimated $12.1 billion in 2020 to $30.1 billion by 2026, according to the report.
Mobile platforms are now considered an “essential service” by financial institutions, with demand for mobile banking services forecast primarily from customers in industrialized countries. Younger generations are driving demand for mobile banking services.
Meanwhile, retail banking is projected to grow at a compound annual growth rate (CAGR) of 14.3% to reach $14.3 billion by the end of 2026, the analysis reported. The corporate banking segment is expected to grow by 18.4% CAGR in the next seven years.