Digital bank deposits poised to surpass $20 trillion by year’s end and $30 trillion by 2028

Digital banking has become a favoured choice among consumers, revolutionizing the way people manage their finances.

With the convenience and accessibility it offers, online banking has witnessed a surge in popularity, paving the way for significant growth in digital bank deposits.

According to Stocklytics.com, digital bank deposits are projected to surpass $20 trillion by the end of the year and reach $30 trillion by 2028.

Stocklytics financial expert Edith Reads said, “Digital banks can provide greater deposit interest rates while being profitable because they do not require physical branches or a large workforce. This cost advantage helps them to attract customers looking for higher returns on their savings.”

Convenience and accessibility are two significant aspects driving core deposit growth in the age of online banking. Customers may now access their bank accounts and complete numerous activities from their homes or while on the go using their smartphones. This convenience has changed how people manage their money and has tremendously impacted the entire banking business.

One of the key benefits of digital banking is that users have 24/7 access to their accounts. People no longer have to rush to the bank before it closes or wait in enormous lines to deposit or withdraw money.

Digital banking has also paved the way for integrating various financial instruments and services, adding to user convenience. Customers can now connect their bank accounts to budgeting tools, investing sites, and digital wallets.

This integration enables customers to comprehensively view their finances and seamlessly move payments between accounts or platforms. The convenience of monitoring multiple financial concerns in one place enhances overall user satisfaction.

The rise of digital banking has coincided with a decline in the presence of traditional banks. The sector lost over 2,500 branches across the US in 2023.

While traditional banks offer access to branches, digital banks offering only online and mobile banking services often provide attractive yields and low (if any) bank fees.

With the rise of online banking, customers have more options than ever before, making it crucial for banks to develop effective strategies to stay competitive in this rapidly evolving landscape.