1. Digital Banks' Adventure in Türkiye in the Last 3 Years 

2. Dijital Banka Kuruluşunda Temel Bileşenler 

3. Challenges Faced by Digital Banks in Türkiye 

4. Architectural Approach in Banking: Microservice or Monolithic? 

5. International Perspective on Digital Banking 

6. The 8 Components Successful Digital Banks Need 

7. The Circular Future Journey of Digital Banking 

A. Digital Banks' Adventure in Türkiye in the Last 3 Years 

B. Key Components in the Establishment of a Digital Bank

1. Target Audience Selection: Digital banks may lose focus in selecting their target audience at the initial stage of their establishment. Individual or legal customer preferences can affect many topics such as product range, customer experience focus, digital channel preferences, technological investment processes and intensity, capital utilization, and time it takes to turn profitable. Here, the short, medium and long term expectations and visioning processes of bank management become critical. Unclear target audience choices cause confusion in internal bank structures, technological investments and the solution partner ecosystem. At this point, it is worth remembering that according to the digital banking regulation, the loan customers of digital banks can only consist of financial consumers and SMEs. 

2. Conflict of Different Views: In business life, the ability to express different views and to look at things from different perspectives is generally accepted as a competency. In the establishment processes of digital banks, the melting of such different approaches into a common pot contributes to positive outputs to the extent that it serves the common vision set by the bank management. However, in a context where the bank's vision remains in gray areas, different perspectives can lead to conflict and lack of coordination between business units and technology units. This can lead to lost time and high costs until common ground is discovered. 

3. Creating Short and Medium Term Visions: In order to prevent the problems mentioned in point 2, it is important for the bank to determine its short and medium-term strategies for the first year and three years, to communicate these strategies to all stakeholders participating in the team, and to disseminate and adopt them throughout the organization. Since all of the Bank's business and IT processes are shaped according to this vision, any complexities that may arise along the way can be overcome by adopting the strategies established at the beginning by all parties and acting on common ground. 

4. Profitability: Newly opened digital participation banks may have to act with the promise of a high profit share on deposits due to competition, and on the other hand, they may follow a low-cost loan policy in loan disbursements. Profitability problems may arise in the early years due to technology and infrastructure investments, new personnel employment, the inverse scissors position in deposit and loan rates, advertising, marketing and launch costs. Although it is thought that digital banks will operate with lower (!) costs because they are relatively branchless, in practice this is not very realistic. This is an issue that challenges digital banks globally as well as in Türkiye.   

5. Capital Situation: There may be situations in which the bank needs to bolster its initial capital after the first few years due to unfavorable outlooks in terms of profitability and efficiency, as well as exposure to an inflationary environment.  

6. Service Quality: Since digital banks cannot be physically structured due to regulations, customer experience and overall service quality in the digital channels where they interact with the customer become very important. In terms of service quality, although the 99.8% continuity requirement imposed by the regulation is stated as a certain criterion for digital banks, it is important to keep in mind that the focus on service quality consists of many parameters other than the continuity requirement.  

1. User Experience (UX) and Interface Design (UI) 

2. Application Performance and Continuity 

3. Customer Support Services 

4. Personalization and Segmentation 

5. Error and Interruption Management 

6. Security and Privacy Perception 

7. Multi-Channel Experience (An integrated and consistent experience across channels such as Mobile, Web, Call Center, ATM) 

8. Customer Feedback and Customer Satisfaction Measurements 

9. Processing Speed and Ease  

10. Inclusiveness 

7. Existing (As-is) Structure or New Developments?: Digital banks may experience uncertainty both during the process of obtaining an operating license and after obtaining an operating license, as to whether they will use the existing core banking application or prioritize new developments with the technology provider IT solution partner company. Here, the first basic task to be completed is to get the existing structure up and running and to make the integrations work, both in terms of speeding up the process of obtaining an operating permit and getting the staff coming from different organizations used to the new system. When new development processes are to be carried out together with the existing structure called “as-is”, it is observed that it is a basic requirement that new development requests are carried out by teams that have a deep understanding of the relevant subject matter for a clear goal. 

8. Personnel Structure and Turnover Rate: The establishment process of digital banks is not only limited to technological infrastructure, but is also directly related to the healthy construction of the organizational structure and the effective management of human resources. Digital banks, which are in a new formation, are usually formed by bringing together personnel from different sectors, traditional banking and participation banking, fintech, technology companies and consulting firms. While this diversity offers advantages in terms of rich perspectives and innovative ideas, it can also pose challenges in terms of cultural cohesion and establishing collaborative dynamics.  

9. Alignment of Business and Technology Teams: Effective alignment of business and technology teams is essential for the successful establishment and sustainable operation of a digital bank. Business teams' understanding of the digital banking concept and technical operation enables them to define needs more accurately and to accurately identify missing or adaptable points in the processes. These teams make requests to technology teams in line with the bank's strategic goals, which plays a critical role in the efficient use of resources, correctly ranking priorities and strengthening the customer experience. 

D. Architectural Approach in Banking: Microservice or Monolithic? 

1. Microservices Architecture in Banking: Between Theory and Reality 

2. The Use of Microservices in Banking: Advantages and Challenges 

3. External System Dependency and Real Life Constraints 

4. Monolithic Architecture: Data Integrity and Consistency 

5. Microservice Compatibility: Not Applicable for All Sectors 

6. Conclusion: Hybrid Architecture Approach 

E. International Perspective on Digital Banking 

1. Pioneering Digital Banks – Early 2010s 

• The first modern examples of digital banks began to appear in the early 2010s. These banks were often fully online organizations with no physical branches. 

• One of the most notable examples during this period was Simple (US, founded in 2009, fully operational in 2012). It was later acquired by BBVA. 

• Fidor Bank (Germany, 2009) also attracted attention as one of the first digital banks in Europe.  

2. New Generation of Digital Banks - After 2015 

1. After 2015, a serious digital bank movement started in Europe and other developed markets. 

2. Players such as Revolut (UK, 2015), Monzo (UK, 2015), N26 (Germany, 2015), Starling Bank (UK, 2014) were established during this period. 

3. The proliferation of digital banks in Europe has been accelerated by regulations such as PSD2 (Payment Services Directive 2). 

3. Compliance with Regulations - After 2018 

• As of 2018, many countries have started to develop specific regulations for the establishment and licensing of digital banks.   

4. New Direction of Digital Banking with Artificial Intelligence Revolution - Post 2025 

• After 2025, digital banking will evolve from being just a service channel with artificial intelligence to a structure that proactively manages the financial lives of users. Thanks to hyper-personalization, autonomous financial assistants, real-time risk analysis and smart regulatory compliance (RegTech), digital banks are transforming into systems that anticipate needs, not just respond to them. This transformation makes banking less of a technological experience and more of a digital financial companion for individuals and businesses. As the artificial intelligence revolution shapes the future of digital banking, speed, trust, insight and personalization are becoming the new competitive axes.  

F. The 8 Components Successful Digital Banks Need 

1. Business Model Flexibility: Digital banks should develop flexible business models that can quickly adapt to changing market conditions. Bank managements must also restructure the way they generate revenue so that the bank can maximize the value of its digital investments. 

2. Operational Flexibility and Resilience: Successful digital banks become more resilient to external shocks by making their processes flexible. Cloud technologies, composable architectures and hyper-automation play an important role in increasing the agility of banks.  

3. Cultural Alignment and Maturity: Lack of cultural maturity is cited as the primary reason why many digital transformation strategies fail, according to Gartner reports. Changing the culture or creating a culture in any organization requires patience and time.  

4. Innovation Competence: Digital banks that focus on innovation instead of traditional structures that generate high costs and low returns will gain competitive advantage. Innovation is still a vague concept in many digital banks. The strict control standards of the banking sector limit banks' innovative growth, leading to low ROI results at high cost. 

5. Ecosystem and Partnership Development: Embedded finance is becoming the new standard in banking. Digital banks should seek to create value by developing integrated service models with fintechs and other digital players.
   
   One of the key determinants of success in digital banking in the future will be the ability of banks to access and manage different digital ecosystems and develop integrated service models with fintech companies and other business partners. As these competencies become the key to creating long-term and sustainable value from technology investments, the role of cloud service providers in enabling such collaborations will become increasingly critical.  

6. Innovative Value Measurement: It is often not easy to accurately measure the value of investments in digital technologies. If the investment is directly targeted at a specific process improvement or product development, it may be possible to identify tangible results, such as cost savings or revenue generated. In most cases, however, the relationship between such investments and direct income is ambiguous and difficult to measure.
   
   Measuring innovative value focuses not only on monetary indicators, but also on non-monetary indicators such as user experience, customer loyalty and increased transaction speed. 

7. Data Focus and Harvesting: The key to growth is the effective use of customer-generated data. With open banking and the increasing diversity of data, banks should create new sources of revenue by analyzing data such as location, visual and behavioral data. 

8. Autonomous Business Models and Programmable Economies: The rise of autonomous businesses assisted by AI, sensors and machines is transforming banking. Banking services are moving towards a structure where decisions are made by autonomous systems and embedded in consumer experiences. Digital banks need to be positioned in accordance with this new economic structure. 

G. The Circular Future Journey of Digital Banking: 2024 Analysis 

• Light blue dots: Technologies expected to mature in 2 - 5 years 

• Black dots: The ones that will become widespread in 5 - 10 years 

• Yellow triangle: Technologies that need more than 10 years (e.g. Quantum Computing) 

1. Innovation Trigger:  
   This is the stage when new technologies first emerge and begin to attract attention. Although not yet commercially mature, they create high expectations. 

• Programmable Money 

• Real-Time Cross-Border Payments 

• Digital Twin of a Customer 

• Intelligent Industrial Assets 

• Homomorphic Encryption 

2. Peak of Inflated Expectations:  
   This is the period when interest in technologies reaches its peak and exaggerated expectations are formed. However, widespread applications are not yet seen at this stage. 

• Sustainable Finance 

• Financial Data APIs 

• Synthetic Data 

• Generative AI in Banking 

3. Trough of Disillusionment:  
   When initial expectations are not met, interest begins to wane. The shortcomings and limitations of technologies become apparent. However, some come out of this stage stronger. 

• Composable Core Banking 

• Hyperautomation Tools 

• Decentralized Identity 

• Retail/Wholesale CBDC 

• Tokenization  

4. Slope of Enlightenment:  
   Technologies have been tested and value propositions have become clear. More and more institutions start to adopt these solutions. 

• Embedded Finance 

• Transaction Data Monetization 

• Real-Time Payments 

• FS Industry Superapps 

• Core Banking on the Public Cloud 

5. Plateau of Productivity:  
   Technologies mature, become widely deployed and generate tangible business value. Technologies that reach this point become standard in the sector. 
   The technology that has fully reached this plateau is limited, but Core Banking on the Public Cloud is the closest to this goal.