An analysis by UnaFinancial projects that by 2025, the net interest income of digital banks in Singapore is set to surge by 20%, reaching EURO €3.3 billion. Concurrently, the number of users of these banks will display a 66% increase, totalling 1.7 million.
Several key influencers are driving this consistent growth in Singapore's digital banking sector, according to analysts from UnaFinancial. There is an expanding demand for alternatives to traditional banking structures, and Singapore's robust digitalisation infrastructure catalyses this transition.
Since 2017, the net interest from digital banks has seen an average annual increase of 60%. The most significant leap of EURO €0.7 billion was recorded in 2022, spurred by the launch of new digital banking platforms in the country. By the close of 2023, the digital banking sector's net interest income stood at EURO €2.7 billion, with UnaFinancial forecasts predicting a 1.2 times growth by the end of 2024, culminating at EURO €3.3 billion.
The user base of such banks, tracked from Aug 2022 onwards, has also shown consistent growth. As of October 2023, the digital banking user population had reached 1 million with a stellar average monthly growth rate of 76%. UnaFinancial anticipates that the number of digital banking users in Singapore will continue its ascent, reaching 1.7 million by 2025, aided by the country's high digitalisation levels. Singapore presently ranks fourth globally in the Digital Competitiveness Ranking 2022.
The study also considered various external factors impacting the digital banking realm. For instance, the number of digital banking users directly correlates with the level of smartphone penetration and the proportion of social media users within the population. Interestingly, it's seen to have an inverse correlation with the inflation rate.
Similarly, the net interest income from digital banks has direct correlations with external influencers such as GDP per capita, internet penetration rate, and, strangely, this time around, the inflation rate, too. These findings give insight into the various dynamics at play that influence the growth trajectory of digital banking in Singapore.
In conclusion, as the digital banking market in Singapore continues to mature, propelled by burgeoning consumer demand and technological advancements, a positive outlook for the industry is forecasted, with a significant increase in net interest income and user numbers predicted by 2025.
The conductor of the analysis, UnaFinancial, is a group of companies developing easy-to-use digital financial solutions in the Middle East, Asia and Europe. Through its AI-based, machine learning and data-driven technologies and processes, UnaFinancial provides precise and comprehensive risk management, comfort and speed for customers.
Technologies and processes enable strong unit economics and superior growth rates, driving robust business performance. The UnaFinancial revenue for 2022 amounted to USD $139.1 million. The net profit has significantly risen, reaching USD $13.1 million as of December 31, 2022.