5 Banking Trends to Watch in 2024

In 2024, banks are prioritizing the enhancement of digital experiences. Key trends are emerging signaling a shift towards digital-first banking services.  

Key Points: 

      • 57% of banks have identified improving the digital experience for customers as their top strategic priority for 2024. 
      • The implementation of innovative technologies such as text pay, and end-to-end digital lending is leading the charge in driving digital transformation within the financial industry. 
      • By 2025, there will be an estimated 42.9 million Gen Z digital banking consumers.   

Evolving Expectations: Digital-first Experiences 

In Deloitte’s 2024 Banking and Capital Markets Outlook, a key theme emerges: the evolving expectations of customers towards digital-first experiences coupled with personalized service. There’s a noticeable surge in the desire for real-time insights into consumer payments, particularly among younger demographics. Customers no longer want, but rather, expect banks to seamlessly integrate technology with personalized consumer journeys According to the Digital Banking Report, 42% of banks perceive a heightened focus on digital transformation as the foremost trend in retail banking for 2024, with an added 42% ranking it as the second most significant trend, surpassing the third trend, simplification of the customer journey. While not the top objective for digital transformation, 57% of banks have named enhancing digital experiences for customers as their primary strategic objective for 2024. It’s clear, many banks are listening to consumers and adapting to the shifting preferences of their audiences in a digital-driven society. Those that do not adapt face the prospect of losing market share. 

Embracing the Rise of Gen Z: 

Gen Z, those born in or after 1997, represent a sizable portion of today’s consumer base. This generation’s reliance on technology and preference for seamless, self-service interactions calls for banks to shift their thinking, operations, and basic audience assumptions. According to Forbes, by 2025, there could be 42.9 million Gen Z digital banking users. To stay ahead of this growing segment within their consumer audience, banks must cater to the unique needs of Gen Z today. 

Enabling Self-Service: 

One non-negotiable for banks aiming to cater to Gen Z is simple self-service options. These digital natives avoid traditional communication channels in favor of instant solutions. Whether it’s changing an address, reporting a lost card, or disputing a transaction, Gen Z consumers prefer the autonomy of resolving issues independently. One such self-service option that banks should consider is text-based payments, known as TextPay. Datos Insights revealed that 88% of Millennials and Gen Zers are likely to use pay-in-text options if given the opportunity. 

Expanding Payment Options: 

Among the various self-service technologies, TextPay stands out as a unique and innovative solution for the banking industry. With TextPay, consumers can initiate and authorize payments directly through text messages using simple keywords as commands. TextPay simplifies the payment process, eliminating the need to log in to online banking portals or navigate through complex menus. 

According to Datos Insights, despite the demand for pay-in-text solutions, only 9% of consumers have been served the option to pay by text. Of those who have used a pay-in-text solution, 74% cite its speed and convenience as the primary factors driving adoption. 

Exploring End-to-end Digital Lending:  

With digital transformation strategies at the forefront of banking trends, many banks are focusing on end-to-end digital experiences. Specifically, end-to-end digital loans. The Digital Banking Report found that 21% of banks surveyed have already digitally transformed end-to-end consumer personal loans, and that 35% claim they will have achieved digital transformation in the next 6 months to a year. Only 15% of banks say that they have not currently planned for end-to-end digitization of consumer loans within the next 3 years.  

From self-service options to innovative payment solutions like pay-in-text, many banks are embracing technology to enhance convenience and efficiency. End-to-end digital lending is a significant stride towards seamless customer experiences. To remain competitive and maintain market share, the banking industry must continue to adapt and innovate in line with these evolving trends.  

 

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