UnaFinancial’s analysis foresees a substantial 20% increase in net interest income for digital banks in Singapore by 2025, projecting a robust EURO €3.3 billion. This growth aligns with a concurrent 66% surge in users, reaching a total of 1.7 million. The driving forces behind this upward trajectory, as identified by UnaFinancial analysts, include a growing appetite for alternatives to conventional banking models and the influential role played by Singapore’s advanced digital infrastructure.
The trend in net interest income from digital banks has been consistently upward since 2017, with an annual average increase of 60%. Notably, 2022 witnessed a remarkable EURO €0.7 billion surge, attributed to the introduction of new digital banking platforms in the country. As of the close of 2023, the digital banking sector’s net interest income stood at EURO €2.7 billion, and UnaFinancial’s projections anticipate a further 1.2 times growth by the end of 2024, culminating at EURO €3.3 billion.
The user base of these digital banks has exhibited steady growth, reaching 1 million by October 2023, with an impressive average monthly growth rate of 76%. UnaFinancial envisions this upward trajectory continuing, with the number of digital banking users in Singapore expected to reach 1.7 million by 2025, buoyed by the nation’s high levels of digitalization, ranking fourth globally in the Digital Competitiveness Ranking 2022.
External factors also play a role in shaping the landscape of digital banking. The number of users correlates directly with smartphone penetration and the proportion of social media users in the population, showing an inverse correlation with the inflation rate. Similarly, net interest income from digital banks correlates with external influencers such as GDP per capita, internet penetration rate, and, notably, in this instance, the inflation rate as well. These findings shed light on the intricate dynamics influencing the growth trajectory of digital banking in Singapore.
In summary, as Singapore’s digital banking market matures, fueled by increasing consumer demand and technological advancements, a positive outlook is projected for the industry. The anticipated surge in net interest income and user numbers by 2025 reinforces the optimistic prospects for Singapore’s evolving digital banking landscape. UnaFinancial, the architect of this analysis, operates as a group of companies developing user-friendly digital financial solutions across the Middle East, Asia, and Europe, leveraging AI, machine learning, and data-driven technologies to provide precise and comprehensive risk management. The company reported a revenue of USD $139.1 million in 2022, with a notable net profit increase to USD $13.1 million as of December 31, 2022.
