The Impact of the COVID Pandemic on Banking Digitalization: An Analysis of Digital Payments and Digital Bank Revenues

Abstract This study examines the impact of COVID-19 on the banking industry with a particular focus on digital payments and digital banking. These comparisons are made regarding digital transactions and the interest income of digital banks, based on a review of 87 countries over seven years (2017-2023). After the COVID-19 pandemic, both digital transactions and revenues from digital banking have experienced moderate growth. It suggests that banks and customers alike are gradually adapting to the new normal. However, we do note vast discrepancies from country to country. These findings are very pertinent for the future of banking in the face of the growing necessity for digital transformation. We performed a clustering analysis wherein countries were classified as emerging economies, modest-growth economies, and digital leaders. We tracked distinct patterns for their adoption rates of digital banking services. These findings make us realize that it is crucial to develop financial strategies tailored to each market’s economic and technological aspects. This study conducted statistical analyses comparing digital transactions and digital bank revenues before and after the pandemic, along with clustering analyses.