Eternity Law International News Digital Banks

Digital Banks

Published:
February 3, 2020

Digital banks: source of profit or cause of loss?

In the era of innovative technologies, the so-called “digital banks” have become very widespread in the world. These are platforms that do not have their own branches in the traditional sense – offices with employees, cash desks, ATMs and terminals.

The emergence and development of such banks is primarily due to unsatisfactory assessments of the traditional banking system.

A large number of investors, employees of companies specializing in the creation of digital products, artificial intelligence, analysis and storage of personal data became interested in these developments. We can say that these are new generation projects.

As an example, consider the famous financial corporations like Revolut, Nubank and N26. The management decided to change the system and move on to the introduction of other products: bank accounts, lending and insurance.

Europe and the USA are gradually introducing new technologies, and Asian states are already launching alternative digital banks.

How to hold on to physical banks? What tools should be used for successful operation?

The popularity of banks, high ratings are not the main indicators. So far, new generation banks are not considered a stable source of income and huge amounts of profit. The activities of such products are investment dependent.

For the first quarter of 2019, investors transferred one and a half million dollars, which is approximately 78% (higher than in 2018). But still, modern digital banks cannot yet be called profitable: for example, Metro Bank, established in 2010, received significant profit only in 2017.

All this is commonplace for similar organizations creating new technologies. Increasing the number of customers has more priority than income. In innovative banks of a new generation, you do not need to pay a commission for services.

If it is, then much less than in ordinary institutions. There are also no requirements for the balance and payment for transactions in foreign currency.

How and when do similar business models become profitable?

The market of innovative technologies is replenished with various developments. The southeastern company “Gojek and Grab” offers customers a wide range of functions: replenishment of a mobile account, payment for the delivery of goods, registration of loans.

Razer, from Singapore, famous for gaming devices, introduced a new electronic wallet.

There are other interesting companies:

  • Chinese WeChat;
  • South Korean Kakao;
  • Japanese-Taiwanese Line.

All of these organizations have developed platforms on the basis of which they create payment services.

PROVISION OF DIGITAL BANKING SERVICES TO USERS

Hong Kong has granted eight licensing permits this year, and Singapore (only planning) five. Taiwan also does not lag behind, here they allowed to provide banking services to several platforms – Line, Next and Rakuten. In Malaysia, too, almost completed the system of Internet banking.

Google provided a detailed report, which indicated a high level of purchases on the Internet. According to the document, by 2025, growth is projected to $ 240 billion. That is, fertile ground will appear for the full prosperity of mobile banking.

Specialists of Eternity Law International will be happy prоvide you with assistance and advice in the financial sector, which is rapidly developing.

You could be interested

Legal assistance in the ICAC

Individual entrepreneurs or legal entities often face an unpleasant situation when foreign counterparties do not fulfill their obligations under contracts and agreements. In such cases, it is recommended to turn to the International Commercial Arbitration Court as a dispute settlement body. Failure to act in such situations leads to many negative consequences, for example, to...

VARA regulations in the UAE freezones

Introduction The United Arab Emirates (UAE) is widely recognized for its prosperous and vibrant commerce base, attracting enterprising individuals and astute investors from around the globe. The establishment of free zones within the UAE has further bolstered its allure, offering a plethora of enticing profits, including lucrative tax incentives, complete autonomy for foreign ownership, and...

Regulatory organization FINMA in Switzerland

The Swiss Financial Markets Supervision Authority (FINMA) is a government agency, a Swiss regulator, which is one of the most reliable in the world, since the requirements of the regulator are very strict. Its activities are focused on financial regulation, namely: protection against the creation of corruption schemes for money laundering, supervision of banks, insurance...

Banking license in Labuan for sale

If you are looking for new business opportunities abroad, we recommend you considering not only countries but also their regions. For example, the Labuan region in Malaysia. Labuan is a federal territory with an independent tax and business law systems. It is situate between Malaysia, the Sultanate of Brunei and the Philippines, so you will...

Regulation of cryptocurrencies in Latvia

To date, at our request to the FKTK – Financial and Capital Market Commission, we have received the official opinion of the Latvian regulator on the activities of cryptocurrencies in Latvia: The emission and use of this type of financial instruments such as cryptocurrencies, in particular bitcoin, is not regulated in any way. Therefore neither...

AEMI license in Czech Republic

The e-commerce sector is gaining momentum around the world and the European market is no exception. For successful work in this region, you can obtain an AEMI permission in the Republic. The holder of such a charter can freely carry out his actions throughout the countries from EU. Advantages of the country A permit to...
Fill the blank:

Zurich

Dreikonigstrasse, 31A, Stockerhof

Kyiv

Baseina street, 7

London

Grosvenor Gardens, 52

New York

1178 Broadway, 3rd Floor #3353 New York, NY 10001

Vilnius

Gediminas Avenue, 44A

Tallinn

Kesklinna linnaosa, Tuukri 19

Edinburgh

Lochrin Square, 1

Nicosia

Jacovides Tower, 5 floor

Riga

Esplanade, 7 floor

Hong Kong

18 Harbour Road, 35/F, Central Plaza, Wanchai

Singapore

Level 42, Suntec Tower Three, 8 Temasek Boulevard

Sydney

20 Martin Place

Porto

2609 Avenida da Boavista

Tbilisi

Revaz Tabukashvili Str., N 45, area N 7