Digital banking poses a challenge to the existence of physical bank branches

The digital banking revolution has transformed the way people manage their finances, eliminating the
need to go to a physical bank branch. This has led financial institutions to rethink their traditional

According to the Association of Private Banks of Ecuador (Asobanca), in 2021, 41% of transactions were
made through digital channels, compared to 21% recorded in 2019, showing the growth of this
phenomenon and the preference of users for online banking.

2Innovate, a platform that provides financial institutions with the fundamental architecture for their
payment systems, assures that “for banks, it is no longer a question of whether they should be digitized,
but how to do it effectively.”

“This digital acceleration that we are experiencing presents an opportunity to reinvent banking, looking
to the future and pioneering a modern banking experience that offers security, profitability and growth
capacity,” said Pablo Pereyra, director of revenue and sales at 2innovate.

Radar Tech Startup assures that Ecuador is opening up in the digitalization of the banking sector,
because the number of financial services that use technology increased by 77% between 2017 and 2021.




According to the latest Digital Banking Report, 77% of bankers globally predict that by 2025, three-
quarters of new accounts will be opened through digital channels.

This forecast coincides with research by The Economist Intelligence Unit (EIU), which revealed that 65%
of bank executives believe the branch-based model will be obsolete within five years.

This is why multiple financial institutions have chosen to close thousands of physical branches in the
main markets, promoting digital services. According to the National Community Reinvestment Coalition,
in the United States 9% of all bank branches closed between 2017 and 2021.

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