North America digital banking market value will increase with demand for auto-debit/credit services

Published Date: August 3, 2022

North America digital banking market share will grow at an impressive rate due to the rising demand for digital payment processes. A large percentage of the millennial population in the region relies heavily on virtual payment apps to carry out their daily financial transactions.

According to software firm Emizen Tech, by the end of 2020, nearly 150 million consumers in the U.S. were using mobile applications for various in-store payments. Many financial institutions are launching newer and safer online payment systems to facilitate easier virtual transactions and safeguard customers from cybercrimes.

For instance, in September 2021, Payments Canada announced the launch of Lynx, a brand-new high-value payment system. The system will not only process time-critical and large-value payments but also adapt to future technologies like APIs and interactive payment interfaces.


Enhanced safety features will fuel digital banking transactions:

The risk of cyberattacks is always looming large on customers who engage heavily in digital transactions. The data published by the U.S. government showed a worrying rise in ransomware activities in 2021. The Treasury Department, in its suspicious activity reports, recorded ransomware-related transactions worth USD 590 million during the first half of the same year.

The situation has compelled governments and financial institutions across North America to introduce failproof plans and strategies to minimize the risk of cybercrimes while availing of digital banking services. For example, in August 2021, the World Bank announced the launch of a Cybersecurity Multi-Donor Fund, which comes under the Digital Development Partnership (DDP) program.

This initiative aims to define and roll out a robust cybersecurity development agenda, ensuring greater security across all World Bank programs and financing. It will also benefit a wide range of digital banking processes.

Digital banking will provide prompt auto debit/credit services:

Auto debit/credit services will capture a sizeable share of North American digital banking market by 2026. As more people are filling out loan applications to buy their desired home and car, manual payment of loan installments can be a tedious task for them.

According to the Federal Reserve Bank of New York, in 2021, households across the U.S. took USD 1 trillion in new debt. This figure was much more than that of any other year before the 2008-09 financial crisis, which was a result of an increase in auto loans and mortgages.

Auto-debit payments offer great convenience to customers as they do not need to visit banks to pay monthly installments on their loans. With the help of innovative technologies integrated into these solutions, banks can alert customers if they find any transactional discrepancies.

U.S. digital banking market outlook will remain positive:

U.S. digital banking market potential will be strengthened by the rise in online payment activity. According to some reports, in 2020, companies that accepted Apple Pay as a mode of payment saw a substantial increase in their revenues as compared to the previous year.

The mobile application held a major share of all the wallet and debit/credit transactions in 2020. With the presence of such high-tech payment modes to make transactions faster and more convenient for customers, the demand for digital banking services will rise in the country.

North America digital banking market size will be fueled by the growing digitization of several processes across banks and financial institutions. The Bank of New York Mellon Corporation, Appway AG, Infosys Limited, Oracle Corporation, Kony Inc., and Intellect Design Arena Limited, are a few of the regional leaders in offering high-quality digital banking services.

The companies are forming partnerships and signing merger & acquisition agreements to expand their presence across North America. For example, European digital-only bank N26 partnered with the U.S.-based Axos Bank to enter the U.S. market and provide FDIC-insured accounts.

 Priyanka Nair