The rise of digital banks has been one of the most significant trends in the financial services industry in recent years. While many digital banks have gained a significant following among digital-savvy consumers, the truth is that profitability remains elusive for most of them. In fact, only a handful of digital banks have been able to register profitability.In today’s environment, profitability is paramount for the continued survival of digital banks. High inflation and interest rates affect the cost of capital and credit, making it challenging for digital banks to operate with low margins. Secondly, venture capital funding for digital banks has decreased, making it challenging for them to sustain growth without generating consistent profits. Finally, regulatory scrutiny on the profitability of digital banks is increasing, with authorities requiring them to demonstrate a sustainable business model.This blog will explore the various factors that contribute to the profitability of digital banks, such as lending, technology monetisation, SME banking, customer base monetisation, and marketplaces, and how they can help digital banks achieve their growth goals.Disclaimer:The scope of this study is limited to digital banks that operate and report their financials as standalone entities, even when they are owned by financial or non-financial organisations. […]