According to a new report by S&P Global Ratings, Georgia's banking sector is showing impressive results in digital transformation, with two major players, TBC Bank and Bank of Georgia, leading the way, controlling 70-80% of the market.
S&P Global Ratings analysts note that Bank of Georgia has made significant strides in digitalization: by mid-2024, 80% of loans and 57% of retail products were provided digitally. TBC Bank also achieved high results, with 68% of loans issued through digital channels, and 70% of retail transactions conducted via internet and mobile banking.
The rating agency highlights that both banks have developed their own digital brands—Tnet and mBank—and created financial "super apps" for comprehensive customer service. The effectiveness of their digital transformation is reflected in their financial performance: Bank of Georgia’s cost-to-income ratio stands at 33%, while TBC Bank’s is at 38%, significantly better than the Georgian banking system average of 45%.
S&P Global Ratings emphasizes that the rest of Georgia's banking sector, which consists of only 15 banks, is just beginning its journey towards digitalization. Although in 2023, the National Bank of Georgia granted digital banking licenses to companies like Space, Pave Bank Georgia JSC, Hash JSC, and Paysera, the agency’s analysts do not expect a significant shift in the competitive landscape.
Experts at S&P Global Ratings attribute this to the fact that the largest banks have already built advanced digital infrastructure, investing heavily in IT systems, human capital, and customer education programs. New entrants will require substantial investments, and a return on those investments is expected only in the medium term.
