$19bn

to­tal in­vest­ments in dig­i­tal tech in 2015

The Daily News Egypt - - News -

The to­tal amount of in­vest­ments in dig­i­tal tech­nol­ogy reached a $19bn in 2015, com­pared to $1.8bn in 2010, ac­cord­ing to Ronit Ghose, the global head of bank­ing re­search for Cit­i­group.

He stated in his open­ing speech dur­ing the fourth Citibank con­fer­ence in Lon­don that more than 70% of these fi­nan­cial in­vest­ments in dig­i­tal tech­nol­ogy is fo­cused on the field of pay­ment ser­vices in the bank­ing sec­tor.

“This sec­tor is wit­ness­ing ma­jor com­pe­ti­tion be­tween global banks in the new mar­kets, such as the Paypal ser­vice for com­mer­cial pay­ments in the US, and the small and emerg­ing com­pa­nies funded by banks that started grow­ing in global mar­kets on a wide scale,” Ghose said.

He added that even though banks pre­dicted the old bank­ing sys­tem to be­come ex­tinct, only 1% of the banks in North America have shifted to the new dig­i­tal in­vest­ment. He ex­plained that dig­i­tal tech­nol­ogy fi­nanc­ing com­pa­nies have a new ad­van­tage for growth and in­no­va­tion, where US and Europe have not reached the point where they start mak­ing prof­its and achieve growth within the sec­tor un­til now.

He went on to ex­plain that China has done well in this field, and gained a large share of the mar­ket of elec­tronic pay­ment and pay­ment ser­vices, achiev­ing no­tice­able growth in its prof­its com­pared to the tra­di­tional bank­ing ser­vices of pay­ments.

With ad­vance­ment in tech­nol­ogy, the re­la­tion of clients with their banks and money has changed, where clients now rely less on vis­it­ing bank branches to take care of their bank­ing trans­ac­tions, as they now have dig­i­tal op­tions to help them, such as us­ing ATMs, the internet, mo­bile phones or on­line bank­ing ser­vices.

Ghose ex­plained that dig­i­tal tech­nol­ogy is not con­sid­ered an added value for cus­tomers in the field of banks and fi­nan­cial in­sti­tu­tions, and it is also a turn­ing point and a ma­jor change in ba­sic bank­ing around the world.

“The more clients use dig­i­tal so­lu­tions, the more banks and bank­ing in­sti­tu­tions will need to re­con­sider their dig­i­tal tech­nol­ogy so­lu­tions,” Ghose said, adding that the in­ter­na­tional econ­omy must rely on the next decade’s abil­ity to al­low com­pe­ti­tion through re­duc­ing the banks’ branches and tar­get­ting new strate­gic chan­nels that reach dif­fer­ent client seg­ments.

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