Digital banking has rapidly evolved from a niche alternative into a major force within the U.S. financial services industry, with online-focused institutions now collectively managing more than $1 trillion in deposits. Research from Mercator Advisory Group highlights the growing diversity of digital banking models, ranging from full-service online banks and fintech-bank partnerships to brokerage- and insurance-owned banking platforms. As electronic payments and digital financial services continue to expand, financial institutions are increasingly being challenged to modernize payment infrastructure, improve supplier enablement capabilities, and adapt to a marketplace that is steadily moving away from paper-based transactions.
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Data for this episode of Truth In Data provided by Mercator Advisory Group’s report – Supplier Enablement: Get More Flexible and Technical
- Full Service Online Banks
- Lenders Gathering Premium Deposits Online
- Brokerage and Insurance Owned Online Banks
- Online Divisions of Diversified Banks
- Fintechs and Bank Partners
Today’s digital banks in the US collectively generate over $1 trillion in deposits
About this report
The revolution in electronic payments has been underway for quite some time but has been much more visible in consumer payments than in the more complicated use cases associated with business-to-business (B2B) payments. Recent advancements include faster speed of payment, increasing options for cross-border solutions, and greater choices for access to such solutions.
In a new research report, Supplier Enablement: Get More Flexible and Technical, Mercator Advisory Group reviews how banks enabling suppliers to accept card payments and other forms of e-payment need to change their thinking and technology and adapt to the suppliers’ point of view. Not doing so will result in missing a large potential opportunity to capture a portion of the trillions of shifting payments volumes moving away from paper.
“The annual growth in B2B noncash payments globally is estimated at about 6.5%, and Mercator Advisory Group believes that the e-payments portion of that growth is about two percentage points higher due to the decline of checks. This varies by region, in particular North America, where the U.S. has been lagging in the elimination of paper process and payments versus some other areas of the world”, commented Steve Murphy, Director of Mercator Advisory Group’s Commercial and Enterprise Payments Advisory Service, author of the report. “ When it comes to the cards business, the enablement challenges have been steeper, both because of the change involved for suppliers and the friction of perceived acceptance costs. The industry has pursued best practice attempts to gain wider acceptance with modest success and now needs to try something new.”
