By Daniel Haisley, EVP, Innovation
With 2023 coming to a close, it’s a good time to consider how the banking industry will evolve in the year ahead. Here are seven trends likely to shape our industry in 2024.
- AI took center stage in 2023 as use of generative AI tools like ChatGPT reached a tipping point. In the coming year, AI will be increasingly personalized, and companies like Google and Apple will evolve their AI-based tools (Siri and Bard, respectively), creating digital assistants that can have extensive dialogues via voice commands with consumers. The banking industry will follow suit. At Apiture, we’re well underway with the development of AI-based tools that will help financial institutions deliver highly personalized, proactive, and consultative digital interactions with customers. For a preview, check out Chris Cox, Apiture COO, discussing the future of banking [MOU1] here.
- Financial institution M&A will slowly tick up (or will tick up in the back half of the year) as persisting higher rates, cost of fund challenges, and delinquency rates increasingly impact the space. Focus will continue on deposit growth and asset tightening. As such, the ability for banks and credit unions to support new account opening digitally at scale will continue to be a high priority.
- There will be a consolidation in the Banking as a Service (BaaS) space, as fintechs will increasingly pool into a smaller number of specialized banks. Most financial institutions teetering on the edge of whether to get into BaaS will opt away from it to avoid the regulatory pressure, despite the need for new deposit streams.
- In the digital banking space, we’ll continue to see more movement and focus on business banking, as initiatives like real-time payments and cash flow automation stand to make material changes to how businesses manage their finances.
- As consumer debt levels and delinquencies move into troubling levels, there will be a renewed focus on financial literacy and education to help customers and members both deal with current debt-loads and avoid future financial pitfalls.
- As guidance is established for data sharing via Dodd Frank 1033, financial institutions will begin the scramble to meet new requirements to empower their customers or members to control access to their data, and for the financial institution to have the technical infrastructure to deliver that information via evolving industry standards, likely FDX.
- Financial institutions will continue to battle increasingly sophisticated fraud schemes and will seek real-time detection solutions that proactively identify fraud before funds leave their bank or credit union. With the proliferation of APIs and real-time events, technology has emerged that can deliver real-time rather than batch alerts, offering greater protection than has been possible in the past.
Learn how Apiture can help your financial institution succeed in 2024 by contacting us today.