Reflecting on where you are is always a good way to start planning for the future, as we step back and recognise the significant progress and change achieved within the financial services industry. From the augmentation of digital solutions to new legislation protecting banking and cash services, evolution continues to unfold alongside a shifting economic and consumer landscape.
As we look to 2024, what topics and trends will be at the forefront of strategic decisions for the year ahead? Let’s look at some of the key areas of focus.
1. Deepening customer connections
Maintaining a customer-first mindset will continue to dominate. We know that to be truly effective, banking needs to go beyond the transaction and align with a consumer’s values and way of life - futureproofing both customer satisfaction and loyalty. This is not so easy however when also faced with efficiency drives and an ongoing streamlining of services.
This is where the power of technology can step in. Customer experience, underpinned with data and personalisation can be the gamechanger in delivering a deeply connected experience. Customers want to be understood and engage in experiences that truly meet their needs, and the power of intelligence and more customised offerings will help deliver that next level of interpreted engagement for the future.
2. The structure of the banking landscape
Legacy platforms are still holding back progress in some areas, but 2024 will be the year that this changes. In a world where consumers are increasingly intolerant of disconnected experiences and want instant services, there really is no other way to remain competitive and profitable but to match these needs.
Building an agile core infrastructure will help enable this and create the adaptability to offer services across multiple channels in a more flexible way. Despite the ongoing acceleration of digital, delivering a blended mix of both physical and digital banking will ensure reliable and predictable services that meet the needs of consumers in that moment; as well as, of course, maintaining consumer choice.
From a physical banking point of view, we have already seen the channel mix shifting with an increase in ATM pooling, outsourcing and branch-in-a-box concepts, and this will accelerate moving forward. Shared banking and collaborative relationships will no doubt expand and spread as the industry focuses on a service-orientated architecture.
3. Resiliency and sustainability
A key driver of recent industry shifts has been efficiency and the need to create more streamlined and cost-effective ways of working. Whilst efficiency continues to be important, resiliency has come to the forefront and will be a strategic priority for 2024. The last few years have demonstrated to us all that the ability to easily adapt is truly a necessity, and this will ignite a reset on certain operations and services.
In connection with this, sustainability will continue to remain a hot topic. Operating sustainably, as well as evaluating customer offerings with a more conscious mind, will elevate strategic ESG conversations. ESG ‘checklists’ also will form a bigger part of decision-making processes for financial institutions moving forward. With half of the lending portfolio of tier-one banks predicted to be linked to sustainability by 2025
i, proactively adopting a greener approach is wise. In the future, we may see sustainability becoming a non-negotiable factor for many consumers.
In summary, the outlook for 2024 is all about adding value. Whether that is greener operations, delivering services when and where consumers want them, or offering a more personalised customer journey, the time for financial services to be relevant and meaningful is now.
i IDC FutureScape: Worldwide Banking 2023 Predictions(ICS #US48660022, October, 2022)
Originally published in
Global Banking & Finance Review
