The impact of COVID-19 on digital-only banks: are they winners or losers?

Katarzyna Schmidt-Jessa ()
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Katarzyna Schmidt-Jessa: Poznań University of Economics and Business

Journal of Banking Regulation, 2023, vol. 24, issue 3, No 4, 310-320

Abstract: Abstract The main objective of this paper is to determine the impact of the COVID-19 pandemic on the operations of digital-only banks. In order to achieve the main objective, two methods have been used. The first method is a strategic analysis, and the second method is a financial analysis of the digital-only banks covering two periods, that is, before the emergence of the COVID-19 pandemic (2018–2019) and during the coronavirus pandemic (2020). The strategic analysis of digital-only banks has shown that they have many weaknesses, as well as the fact that they face numerous threats, which are due to the age of fintech banks and competition from traditional banks creating and developing mobile and Internet banking. Preliminary analyses conducted for digital-only banks indicate that most of them generated losses, and these losses were already at the operating level. The return on assets and return on equity ratios showed a slight improvement in 2020, and in most cases the interest income generated was higher than the interest expenses.

Keywords: Digital-only banks; Mobile banks; Fintech; COVID-19; Pandemic (search for similar items in EconPapers)
JEL-codes: G21 O10 O33 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1057/s41261-022-00198-0

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