Digital banking forecast: The top trends reshaping the industry in 2024

6 min read

The year 2024 holds great promise as a time of transformative changes, offering both challenges and opportunities for those who are willing to embrace innovation and make strategic decisions. In this era of uncertainty, it is those who dare to take bold steps, implement ambitious strategies, and develop adaptable technological infrastructures that will emerge as the winners in the banking industry. By navigating the unpredictable market and laying a solid foundation for future growth, banking leaders can position themselves for success in the dynamic times ahead.

Digital banking trends and predictions for 2024

In the coming year, banking industry leaders will face the challenge of navigating a dynamic landscape influenced by the constant advancement of technology, evolving customer demands, regulatory changes, and unpredictable economic circumstances.

Banking CIOs and CTOs should prioritize digital transformation efforts to boost operational efficiency, enhance the customer experience, and foster innovation in product offerings. Investing in modern infrastructure, data analytics, and cloud technologies is vital to support digital initiatives.

ebankIT in the Unchartered territory: Digital Banking Trends and Predictions 2024, highlights a strategic roadmap that CIOs should follow in order to unlock their path to success. 

1. Humanizing digital banking

2. Collaboration rather than competition

3. Harness AI and automation

4. Cultivate composability and adaptability

5. Cloud banking

As we delve into the exciting realm of upcoming transformative technologies and trends shaping the future, we invite you to explore the full report in depth by downloading it.

 

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1. Humanizing digital banking

Millennials and Generation Z are digital users who have become accustomed to the gold-standard onboarding journeys delivered by big tech players. They will not tolerate legacy banking practices and expect to be able to access services at any time, from anywhere.

Banking executives and tech leaders must focus on comprehending and addressing the evolving needs and expectations of their customers by utilizing data analytics and customer feedback. Digital channels can provide the same positive halo effect as in-branch interactions thanks to chatbots, which can quickly deal with routine tasks and add a human touch. Incorporating the branch-like human experience into their digital channels will give institutions a significant edge in 2024. They can create a competitive advantage by designing customer journeys that cultivate a more welcoming and amicable relationship between banks and their clients.

 

 

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2. Collaboration rather than competition

Instead of viewing fintechs as competition, banks and credit unions have much to gain by joining forces with them. By collaborating with fintech companies, tech firms, and other players in the ecosystem, financial institutions can forge valuable partnerships and create ecosystems of collaboration. This allows them to enrich their product portfolio, extend their market reach, and ultimately thrive in the ever-evolving banking industry. Additionally, collaborating with regulatory bodies and industry associations provides an opportunity to influence regulatory frameworks and shape the future of the industry.

Embracing collaboration with external partners, such as fintech companies, holds immense potential to expedite financial institution's entry into the market, provides more accurate budget forecasts, and ultimately foster a culture of continuous innovation and success in a rapidly evolving marketplace. As consumer demands continue to soar, it is imperative for traditional platforms to adapt and remain competitive.

For smaller community banks and credit unions aiming to compete with larger banks and maintain their innovative edge, investing in a ready-to-use digital banking platform can serve as the perfect solution.

3. Harness AI and automation

The financial services industry has long recognized the immense potential of AI. In 2023, the introduction of Generative AI, specifically ChatGPT, propelled the adoption of AI to new heights. Banks swiftly adapted to this transformative technology, with nearly three-quarters of companies prioritizing AI over all other digital investments, as revealed by an Accenture survey. As we step into the year 2024, the significance of harnessing the potential of AI and automation has never been more crucial.

Generative AI enables a new level of personalization, giving financial institutions the opportunity to extract meaningful insights from customer data and then tailor their services, journeys and experiences. By embracing AI, financial institutions can streamline processes, enhance decision-making, and reduce operational costs through hyperautomation. Invest in AI for effective fraud detection, improved customer service, and advanced predictive analytics.

4. Cultivate composability and adaptability

A transformative shift is underway to decentralize IT services across the enterprise. This shift is accompanied by the emergence of business technologists, leading to the formation of fusion teams that require access to business-centric services without necessitating deep technical expertise.

This trend is driven by the increasing ubiquity of APIs in application design within organizations and collaboration with vendor applications. 60% of finance organizations are predicted to deploy composable finance applications, using modular technology solutions delivered by a range of vendors, according to Gartner. Beyond technological adaptations, factors like organizational structure, project management, and the alignment of IT with business objectives will make the adoption of this trend gradual.

5. Cloud banking

In 2024, the cloud sector will characterized by cost optimization, specialization among cloud providers, the integration of mission-critical applications, and a broader array of decision-makers driving cloud strategy, ultimately shaping the future of banking.

Furthermore, the composition of cloud workloads is expected to undergo a dramatic transformation. Cloud environments are poised to encompass a more extensive array of mission-critical applications than ever before. Financial institutions are gradually disentangling themselves from the confines of tangible assets and capital expenditure (capex) models. Instead, they are increasingly inclined to embrace services and operating expenditure (opex) models. cloud technology is set to play a pivotal role as a cornerstone of the broader economic strategy, characterized by intangible assets.

Discover more trends and predictions by downloading the full report. 

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