The new year is set to bring about significant change in finance and banking, driven by a convergence of technological advancements, shifting customer preferences, and an increased focus on innovation. At the heart of this transformation lies the influence of artificial intelligence, fundamentally altering the operational landscape of both industries. To address these changes, we've outlined numerous key trends set to take hold in 2024 and beyond.
Key Trends in Banking and Finance
1. Increased use of personal finance apps
The pandemic accelerated the adoption of personal finance apps, with downloads surging by approximately 90%. With over 7 billion smartphone users globally, these apps offer not only remote money management but also increased access to finance from digital lenders. As Europe continues its embrace of open banking, the popularity of finance apps is expected to grow further, increasing opportunities for banks and other lenders to leverage data-driven modelling to service growing consumer demand.
2. Blockchain integration
Blockchain technology is set for a significant resurgence in 2024, seeing it poised to become an integral part of traditional financial systems. As banks transition to cloud-based banking in 2024, blockchain facilitates cheaper and more efficient transactions while ensuring robust security. Major financial institutions like HSBC, Wells Fargo, PayPal, Mastercard, and JP Morgan are actively embracing blockchain for various applications, from settling forex trades to automating insurance payouts using smart contracts.
As blockchain continues to mature, it holds the potential to transform how financial transactions are conducted, giving rise to more secure, efficient, and interconnected financial ecosystems.
3. AI in financial services
As with blockchain technology, numerous financial institutions, including Bank of America, Citigroup and Wells Fargo are driving initiatives around generative AI, leveraging technologies like ChatGPT for better customer experiences. This trend is expected to bring about innovations such as personalised financial planning and bespoke investment strategies based on customer profiles and behavioural data.
In the case of debt management, AI’s impact is already spearheading significant change - and we’re helping to foster this digital transformation through AI-powered performance. Read our blog post to learn more: Maximising ROI: 7 Ways AI-Powered Collections Boost Revenue
4. Maximising efficiency through process automation
2024 is the year of change for manual and repetitive processes. Led by advancements in AI, resource allocation and previously labour-intensive workflows will be optimised using technology. Tasks traditionally requiring human intervention, such as onboarding new customers, processing routine transactions, filing invoices, and compliance procedures, will increasingly fall under the purview of AI-driven automation. This shift not only promises significant time and cost savings but also ensures a higher degree of accuracy and consistency.
5. The rise of open banking
Open banking’s upward trajectory is on pace to continue in 2024, granting individuals unmatched control over their financial data. This transformative trend relies on the secure sharing of information through Application Programming Interfaces (APIs), fostering a competitive environment among service providers. APIs act as connectors, facilitating seamless communication between diverse financial applications and paving the way for innovative solutions tailored to individual preferences.
Beyond enhancing convenience, open banking helps to enable financial inclusion by breaking down traditional barriers, enabling more people to access mainstream financial services and participate in an increasingly digital economy. As this paradigm shift unfolds, we anticipate a future marked by creative solutions and heightened security measures.
6. Cloud adoption by banks
The accelerated shift to digital services, as driven by the pandemic, has led a growing number of banks to gravitate towards cloud technology in recent years. This is set to continue beyond 2024, with global spending on cloud services predicted to reach $1.35 trillion by 2027, according to the International Data Corporation.
Chatbots powered by AI are transforming customer interactions, providing personalised and efficient support, while transaction analysis capabilities contribute to enhanced security and fraud detection. The symbiosis of AI and cloud technologies is thus proving to be a driving force, fostering further innovation, improving customer experiences, and solidifying the foundation for the next phase of digital change in the financial industry.
7. Increased robustness in cybersecurity
The persistent rise in both the frequency and sophistication of cyber threats has propelled cybersecurity to the forefront of operational priorities throughout the growth of digital banking. Countering evolving data security threats requires a multifaceted strategy, demanding sustained investment in robust infrastructures and the subsequent development of specialised skills. Expect this priority to remain ever-present in 2024, with the resilience of cybersecurity measures becoming integral to sustaining the integrity and reliability of digital banking platforms, ensuring that consumers can engage with confidence in an interconnected and digitally-driven financial landscape.
The financial services industry is on course to undergo a profound transformation in the coming 12 months and beyond, underpinned by tech innovation and evolving consumer expectations. The trends outlined for 2024 underscore a shift toward digitisation, changing operational paradigms around blockchain technology, and personalised financial management. The pivotal role of cloud SaaS technology, as well as cloud services, is evident in facilitating this transformative journey.
To find out how receeve can help your business drive true collections agility and recovery performance through AI-powered debt management, book a call with us today.