In Taiwan, the digitalization of banks has imparted a future trend
and a national financial technology (FinTech) policy. This paper aims to study
which factors will affect the promotion of digital banking amongst digital
accounts. Categorically, we applied the principal components analysis (PCA)
method to analyze and identify the main factors of digital banking development.
In addition, this study used three years of data from 2017 to 2020 since the
data were relatively comprehensive and included all the large financial holding
companies (15 in total) in Taiwan. The empirical findings can briefly be
summarized as follows: a bank that wants to promote digital accounts must start
with a credit card since that is what digital finance must be bound to. They also
need to let people know that digital accounts have many advantages, such as no
deposit limits or interest-free cross-bank withdrawals. There are a few crucial
factors that need to be considered, including the number of free transfers, the
card in force, active cards, and the number of free withdrawals. If banks
effectively promote and attract people to apply for digital accounts, it could
strongly contribute to the development of digital banking in Taiwan.
JEL classification numbers: C45, G10.
Keywords: Financial technology, Digital banking, Digital account,
Principal components analysis.