Besides all the harm, COVID-19 has accelerated the adoption of technologies, gave a significant
boost to the digitalization, spurred financial innovation, and encouraged people to try out online
banking for the first time.
The pandemic undoubtedly created new opportunities and propelled banks to come up with
creative ways to support the economy and keep business open. Across the globe, banks and new
financial technology firms (Fintechs) have been exploring ways to keep up in this fast-changing
environment by focusing on a more efficient and innovative business model. It’s no surprise that
in this transformational race, digital banking grew in popularity. This digital transformation has
triggered growth across the world with a rapid and massive shift to digital banking in countries
such as India and China.
According to the World Economic Forum, the development of digital banking infrastructure in
India is worth a special mention. In India, banks have been proactively driving the digital agenda.
They have invested in technology and customer awareness. As a result, significant volumes of
funds have moved to digital banking. Shri Shaktikanta Das, Governor of the Reserve Bank of India,
attributes the ‘higher levels of sustainable development and financial inclusion’ to growth in digital
The digital banking landscape in China is also noteworthy. In just 5 years after the launch of the
first online-only bank of China, WeBank, serves approximately 270 million clients, has no physical
branches or outlets and grants loans through face recognition technology and big data credit
Customers experienced the ease of digital interaction with their bank and are using digital
channels for banking with a much higher frequency. As the world of banking continues to go more
digital, various technologies are necessary to powering transformation, such as big data, artificial
intelligence, cloud computing, robotics process automation, chatbots, Application Programming
Interface (APIs), and biometric identification.
With digitization and artificial intelligence, banks can access real-time data and analytics, reshape
their services to the wants and needs of their clients at individual level and improve their

1 Source: The World’s Biggest List of Digital Banks (

With this digital transformation, cyberattacks are also becoming more common, sophisticated,
and posing increasing threat to the sector. One of the main ways criminals target banks is through
their customers. They prey on the naivety and ignorance of those who do not grasp the dangers
existing in this digital space, consequently tricking the customers into disclosing crucial banking
information. Therefore, digital banks must provide the best services while protecting the bank and
its customers from malicious attacks. This is done through regular evaluation of the banks’
operating environment to ensure that emerging risks are mitigated adequately and in a timely
Digital banking will continue to grow across the world in the coming years. According to research,
the global digital banking market size was valued at USD 803.8 billion in 2019 and is projected to
reach USD 1,610 billion by 20272. The number of people using digital channels is also growing,
with the number forecasted to reach 2.5 billion in 20243.
Banking in the digital space brings potential benefits in terms of competition and inclusion but
brings risks as well. In fact, digital banks and traditional banks face similar basic risks. So, the
transition to digital banking leaves in place the primary regulatory mission, which is focusing on
credit, liquidity and capital adequacy. But digital banks, in addition, must consider the extra aspects
of doing business in a digital manner. Technology risks require a set of specific requirements.
From a central bank perspective, the challenges would be:
• finding the right balance between encouraging financial innovation and maintaining the
safety and soundness of the financial system;
• ensuring a robust regulatory and supervisory framework to address risks specific to digital
banks; and, in particular relevant for Curacao and Sint Maarten;
• access to non-digital financial services remains guaranteed for everyone to avoid
vulnerable people becoming unbanked or socially excluded.
With this sense of understanding, it is clear that banks can no longer take a defensive approach
against digital transformation, while central banks should be prepared to support the
transformation process.
Since the COVID-19 pandemic, CBCS with increased frequency fields inquiries and requests to
establish digital banks. Market entry of digital banks is still in its early stages in Curaçao and Sint
Maarten, but it is anticipated that this digital transformational trend continues as a result of the
shift in customers preference from traditional to digital channels. Furthermore, players notice
potential benefits of a digital bank in terms of competition and a mean to serve the financially
excluded population.

2 Source: Digital Banking Report Market Report. 3 Source: Source © Statista.

Supporting this transformational process, CBCS introduced Instant Payments early 2022.
Following up on the introduction of Instant Payments, CBCS is focusing this year on vendor
selection for Peer-to-Peer (mobile-to-mobile) payments, in-store instant payments, and the
support of ecommerce through this platform. CBCS plans to launch these initiatives next year.
In conclusion, the emergence of digital banking is revolutionizing the financial services landscape,
allowing customers to potentially enjoy faster, cheaper, and more convenient services. However,
with these transformational advancements come new risks and challenges, which central banks
around the world are taking proactive measures to identify, quantify, and propose mitigating
measures. Through modern regulatory frameworks, collaboration with creative stakeholders, and
investment in technological advancements, central banks, including the CBCS, aim to ensure that
digital banking remains safe, stable, and inclusive for everyone.
The CBCS welcomes this digital transformation and is in the process of shaping and reviewing its
strategic (research) agenda on the legal, practical, and regulatory aspects of digital banking within
our jurisdictions. At the end, the CBCS has the ambition to support the financial sector to a resilient
and inclusive eco-system by embracing the positive impact that these emerging technologies,
products and services may have for our financial sector as a whole.