Russia outstrips US in digital banking

There are as few as 249 digital-only banks in the world. Of those, only 13 ones are profitable, writes Lenta.ru with reference to the Boston Consulting Group (BCG) report.

One of those profitable banks, Tinkoff, operates in Russia, and in terms of success in this banking sector niche, the country surpasses the United States, where no such organizations exist. There are three digital banks in Europe, and the world leader is the Asia-Pacific region, where 20% of the total number of such entities operate, with 10 of them being on the list of 13 profitable ones.

Meanwhile, successful banks are supported by a large well-established company with extensive business experience or a large ecosystem, explained Natalya Gerashchenko, senior partner and managing director of BCG, who heads financial institutions practice in Russia and CIS. This kind of support gives them certain benefits, including brand awareness and customer base. It is retail lending that makes leaders strong now, and according to BCG, three pillars of digital banking success are customer obsession, scalable and agile technology, and flexible organization and management.

“We see all these conditions are in place with the leaders, including Russian Tinkoff, which not only entered the 13 profitable digital banks in the world, but also became one of the leaders in terms of nation-wide financial inclusion, demonstrating an indicator exceeding 9 percent,” said Max Hauser, who heads BCG’s Digital practice in Russia and CIS.

According to him, financial institutions operating in a digital format are still at the beginning of their journey – in terms of deposits and loan portfolio, none of them has a share in their own markets exceeding two percent.

Source: Lenta.ru

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