Digital Banks are Coming
Banking Regulation and Supervision Agency (BRSA) authorized the establishment of a digital deposit bank with a capital of 2 billion Turkish liras and with the trade name “Colendi Bank Anonim Şirketi” in its decision published in the Official Gazette on 5 August 2023 (Decision). It is expected that digital banks will take more place in our lives with similar permissions granted by the BRSA under the Regulation on Operation Principles of Digital Banks and Service Model Banking (Regulation).
The financial sector is becoming more and more digitalized with each passing day just as many other fields. In particular, digital banking is one of the most significant manifestations of the digitalization of the financial sector. The Regulation which was effective as of 1 January 2022 sets the legal frame of digital banking within the scope of the fintech sector. As per the Regulation, a “digital bank” is defined as a credit agency that provides banking services through electronic banking distribution channels instead of physical branches. Thus, digital banks can be summarized as organizations established as branchless banks.
The transformation of banks, which many people in Türkiye associate with physical branches, into completely digital and branchless entities, is a topic that needs to be closely monitored for its impact on customers. Despite the increasing use of electronic and mobile banking, the percentage of transactions conducted in branches still holds its significance. In this context, there is a curious anticipation regarding how digital banks will impact the banking and financial sector.
The full text of the Decision can be found here (only available in Turkish).