International rating agency S&P Global Ratings has released a report on the growth of digital banking in Armenia, highlighting the increasing influence of technology-driven banks.
According to the report, digital banks such as Inecobank, Evocabank, and ID Bank have shown impressive development. Over the past five years, their assets have grown by an average of 21%, while the rest of the banking sector has only seen a 12% increase.
S&P Global Ratings analysts focus on the quality of mobile banking applications. Digital banks receive high user ratings (4.5-4.6 stars) in Google Play and Apple Store, significantly outpacing traditional banks, whose apps average 3.3 stars.
However, experts note that a full transition to digital banking is still hampered by legal requirements for in-person document signing and the preferences of older clients.
According to S&P Global Ratings, Armenia’s financial sector, with assets totaling approximately $23 billion in 2023, remains relatively shielded from new entrants due to its small size.
The report also highlights significant progress in the development of cashless payments. In the fourth quarter of 2021, 70% of card transactions were for cash withdrawals, but by the end of 2023, this figure had dropped to 50%.
The agency’s analysts point out that the average non-cash payment is about $20, and nearly half of all payments for goods and services are processed through virtual POS terminals. E-money has become more popular than bank cards for utility bill payments.
However, S&P Global Ratings notes that the development of digital services in Armenia follows a typical emerging market model: high concentration in the capital, with significant lag in the regions, where half of the country's population resides.
