In an era of constant change, banks tackle short-term hurdles while staying committed to long-term goals. Join us as we explore the vibrant world of the 2024 banking industry, where every twist and turn unveil thrilling changes set to redefine the financial landscape. 

Source: Celent – Technology Trends Previsory Corporate Banking 2024

Trend #1 Banking revolution with Generative AI 

Banks may benefit from generative AI in a number of ways. Among the processes it helps to optimize and enhance are credit scoring, risk assessment, fraud detection, and compliance management. Additionally, AI offers opportunities to enhance and personalize the customer experience. Large data sets may be analyzed using artificial intelligence (AI), which can then be used to provide customers with specialized financial services, recommendations, and solutions. 

Trend #2 Embedded Finance in Banking 

Embedded finance is transforming banking through the integration of financial services into non-financial channels. This help banks to enter new markets, enhance customer acquisition rates, and broaden their service offerings through digital ecosystems. Numerous banks are investigating embedded financing. However, a Boston Consulting Group analysis indicates that just 27% of the largest banks are substantially involved in collaborative ecosystems. Most of them are still experimenting and taking small-scale business risks. 

Trend #3 Evolving Global Regulatory Environment 

Changes in regulations are another important trend, with an emphasis on compliance, especially in the areas of cybersecurity and fraud prevention. More rigorous governance is indicated by the implementation of new consumer duty laws and the focus on data and analytics to guarantee positive customer outcomes. 

Trend #4 Instant Payments: Transforming Transactions 

Enter the era of instantaneous payments, which will be a major 2024 trend. Instantaneous money transfers have been transformed with the introduction of the FedNow service in July 2023. The significant role payments have played in this year of transformation is highlighted by the merging of PSCU and COOP and the broad use of payment technologies through APIs. 

Trend #5 Open Banking: Reshaping the Financial scenery 

People will have more control over their financial data, and open data in banking will encourage innovation and increase consumer happiness.  In order to enable easy payment for clients during their purchasing excursions, it means that third-party providers, such as Fintechs or software suppliers, obtain client data through APIs. By 2030, the GDP of the EU, the UK, and the USA would increase by 1.5% if open-data ecosystems are widely adopted, according to a McKinsey forecast. 

Trend #6 Enhancing Customer Experience through Personalization 

Personalization extends beyond traditional banking services; banks are exploring methods to offer customized budgeting tools, financial guidance, and even lifestyle suggestions. To get more insight into the behaviors and preferences of their clients, banks are utilizing machine learning, artificial intelligence, and data analytics. The objective is to provide a seamless and interesting customer experience that fosters enduring relationships and consumer loyalty. 

Trend #7 Embracing the Ascendance of Digital Currencies and Tokenization 

Two separate concepts exist in the fields of blockchain technology and finance: tokenization and digital currency. Central bank digital currencies, or CBDCs, are becoming more and more popular. This might have an impact on the whole financial system.  Tokenization is the process of converting real-world rights or assets into digital tokens on a blockchain. Following that, you may use, transfer, or swap these tokens to gain access to specific services. 

Trend #8 Innovative Cost Reduction Strategies  

AI-powered intelligent automation (IA) and robotic process automation (RPA) will streamline back-office activities, save costs, and increase efficiency. Automation will continue to change the sector. By doing this, human resources will have more time to devote to higher-value tasks like strategy planning and assisting customers. 

Trend #9 Fortifying Security: Cybersecurity Essentials 

Banking institutions and Fintechs will need to make significant investments in cybersecurity defenses as cyberattacks get more complex. Using sophisticated threat detection and prevention technologies, establishing zero-trust architecture, and training staff members on cyber hygiene procedures are some examples of this. The majority of smartphone users do not have antivirus software installed on their phones in this day and age. 

Trend #10 Sustainable Banking: Navigating ESG Compliance 

Customers’ growing need for inclusive and sustainable financial solutions is causing the banking industry to place a greater focus on ESG (Environmental, Social, and Governance) compliance. Furthermore, accessibility is starting to play a major role in ESG compliance. As to the EU Accessibility Act, financial services must be rendered in an accessible manner by June 28, 2025. This rule seeks to guarantee that financial services are inclusive and accessible to all while simultaneously enhancing accessibility for the elderly and those with impairments. 

In a world that is becoming more interconnected, these advancements are essential to satisfying consumer demands and expectations. Financial institutions may successfully position themselves in the digital era if they adopt these technologies.  

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