COVID-19 update included
The content of this report will be updated with the latest scenarios based on the global COVID-19 Pandemic


The emergence of digital-only banks has jolted incumbents into varying degrees of panic. On paper, their business model seems enviable. Operating costs are low, unburdened by old legacy IT systems and costly branch networks. Consequently, superior operating efficiency enables competitive pricing. In addition, newer technology infrastructure allows for a more sophisticated and capable digital banking experience for customers. Faced with this new challenge, it is important for incumbent banks not to forget what their customers actually want.

While digital-only banks do possess significant competitive advantages, recent launches have demonstrated they also face difficult challenges that technology or price can’t solve. The benefits of digital banking to the customer and provider make the broad direction of strategy fairly simple: digitize.

The key question for banks is, to what extent? Do digital-only banks pose such a threat to valuable customer bases that wholehearted emulation is required? Or would digitizing selected parts of bank propositions be sufficient to mitigate the threat?

The report "Digital-Only Banks: Threat or Motivator?", aims to assess the risk posed by digital-only banks, identify vulnerable customer segments, and highlight actions that incumbents could make to improve their retention prospects.

Key Highlights

  • One in three consumers globally indicate a willingness to transfer their primary banking relationship to a digital-only provider.
  • Consumers in India, Singapore, and Scandinavia are the most receptive to using a digital-only bank as their main current/checking account.


This report assess the threat posed by digital-only banks and highlights changes incumbents could make to their digital banking platforms to mitigate the risk by -

  • Analyzing the unique environments shaping demand across a range of different markets.
  • Identifying customer segments most at risk within affluence and generational bandings.
  • Highlighting the PFM tools and mobile banking features that are most in-demand.

Reasons To Buy

  • Build a more targeted retention strategy
  • Make more informed decisions about investments in PFM tools
  • Determine which mobile banking features to implement first.