A new award from Global Finance recognizes banks with outstanding service and practice, but not necessarily the biggest balance sheets.
Each year, Global Finance honors banks that lead in the development of digital tools and adoption of digital practices with its Best Digital Bank awards. The winners list is dominated by powerhouse institutions that can marshal significant resources in pursuit of their digital initiatives.
Still, the Internet era is characterized by the kind of upheaval that can raise up smaller entities and bring down larger ones, so it makes sense to give consideration to the digital innovations among middle-market and local banks. Let’s be clear, these banks are neither small nor weak—JSC Alfa-Bank is among the largest private commercial banks in Russia, and this summer was upgraded from negative to stable by S&P Global Ratings, which noted its above-average profitability. Overshadowed by giants, however, they must deploy thoughtful strategy to compete.
Take Alpha Bank of Greece, for example. Operating under extremely difficult conditions, the bank is still seeking to grow through innovation even as it shores up its balance sheet and pares back bad loans. It has joined with KKR Credit to assign management of some of its corporate clients’ credit and equity on a shared platform. Partnerships are popular among these mid-market innovators, because it’s often more efficient for them to leverage technology than to develop it in-house. Similarly, E.Sun Financial Holding of Taiwan is recognized in part for savvy moves like partnering with Alipay, China’s leading online payment provider, to facilitate e-commerce between the island and the mainland, where lack of a currency settlement mechanism between the Taiwanese dollar and the yuan stifles cross-strait transactions. Taiwanese suppliers in the food, garment, cosmetic, gift, entertainment and other industries will be able to sell online to mainland buyers and get paid through E.Sun Bank.
Israel Discount Bank also makes a strong showing. Israel is a fintech heaven of sorts: A fifth of the nation’s GDP is devoted to R&D innovation, and it has more venture capital funds per capita than any other nation. CEO Lilach Asher-Topilsky brought Discount, the nation’s third-largest bank, a strong grounding in digital client service: Starting in 2002, she had been responsible for developing Internet banking at Bank Hapoalim. Discount Bank’s latest quarter showed strong results across the board: Year-on-year, net profit was up 46%; lending—public, retail, and housing—up by 10% to 13%; and return on equity was 12%.
Or consider Sri Lanka’s tiny giant, Sampath Bank, which holds title to a slew of technology firsts in the country or region: first ATMs and first check imaging site in Sri Lanka, first debit card in South Asia, and more. It illustrates how innovation is not just the province of major players; smaller banks that are agile and progressive can outperform larger competitors more weighed down by legacy practices.
These banks may be outspent by their behemoth competitors, but they still consistently provide best-in-breed solutions to their retail and corporate clients. The honorees are truly among the world’s best digital banks.
Winners were chosen among entries evaluated by a world-class panel of judges at Infosys, a global leader in consulting, technology and outsourcing. Global Finance editors were responsible for the final selection of honorees. Only banks that entered the competition were considered for awards, and awards were given only in those regions, countries and categories in which there were entries. Banks were sorted by asset size within regions, and those from the lower half of the asset ranking were eligible for the Digital Bank of Distinction Awards.