Technology continues to disrupt and transform the way we transact, invest, and plan for our financial futures. For businesses operating in the banking and finance sector, keeping in stride with the latest advancements is key to success—and a necessary ingredient to continuously meet customer demands. In this blog, we’ll explore the latest digital trends that stand to reshape FinServ in 2024 and beyond.
Trend #1: Open Finance Advancements
Open finance APIs have improved app development for FinServ and removed inclusion gaps for billions of people across the globe.1 By enabling secure and controlled sharing of customer financial data among institutions, vendors, and third parties, open finance APIs have drastically accelerated technology adoption and lowered barriers to entry for new players in the industry. Future trends show even more possibilities may be on the horizon for open finance, as FinServ entities look to extend new banking, lending, and investing services outside of traditional intermediaries.2 This can include a wider set of integrations with non-financial industries, more green or sustainable apps, and new offerings that expand the scope of today’s financial services. Today’s businesses are also looking to open finance APIs as a central means to satisfy regulatory requirements and reduce the effort needed to maintain ongoing compliance with the ever-evolving industry standards.3
Trend #2: Fintech on the Move
Fintech has become a staple in the banking and financial services industry. From blockchain to mobile payment apps, fintech has been at the forefront of FinServ innovation—reimagining how consumers bank, save, and plan. Yet, an oversaturation of fintech in the B2C space, high inflation rates, and more conservative venture capital lending suggest economic headwinds may be on the horizon for these providers.4 To survive in this ultra-competitive market, many are shifting their focus from a direct-to-consumer model in favor of a B2B approach. Experts predict this recalibration will not only create new revenue streams, licensing opportunities, and stability for fintech providers themselves but will also infuse financial and banking institutions with a new wave of modern innovations that were formerly reserved for the B2C space.5
Trend #3: Personalized Experiences
The race is on as businesses across every industry are embracing immersive tech and data-driven insights to deliver more personalized user experiences. FinServ is proving to be no exception. Industry practitioners cite today’s consumers demand hyper-personalized interactions that promote better financial health, automate day-to-day transactions, and help preserve human-to-human connections.6 To keep pace, experts predict FinServ will lean even harder into conversational AI, automation, and machine learning to further enrich customer interactions and create more captivating brand experiences.7 This can help businesses extend more tailored financial recommendations to consumers, craft new digital offerings, or provide interactive insights that guide users to more sound banking decisions.
Trend #4: Visible Security
Security, unsurprisingly, is a critical focus for FinServ. In fact, cybersecurity was cited as the leading challenge by community bankers, ahead of industry margins.8 And for good reason as FinServ has already experienced its fair share of data breaches and remains a top target by criminal groups and hacktivists.9 It’s anticipated that businesses operating in the financial sector will double down on privacy and protective measures for their customers but in a new way. Experts project a new push to make security more tangible to users by increasing its visibility within online and mobile applications.10 The hope is to instill better trust and forge new competitive advantages by physically demonstrating an ongoing commitment to protecting customer data and financial well-being. This may include new investments that increase the transparency of authentication and access workflows to prevent fraud, PII exposure, and account takeover. Usability investments are also forecasted to prevent newly introduced security measures from degrading experiences or introducing user fatigue.11
The new era of banking and finance will be defined by digital disruptors and innovators. From open API ecosystems to new security advancements, sustaining success in the FinServ space is directly correlated with your ability to harness and apply the latest technologies.
- CGAP, How Open Finance Can Reduce Financial Inclusion Gaps, Mar 2024
- Neontri, Open Finance – The Next Step of Open Banking, Nov 2023
- Fortinet, The Evolution of Cybersecurity in Banking, Sep 2023
- PYMNTS, FinTechs Look to M&A for Profitability as Economic Shake-Up Continues, Aug 2023
- Forbes, Is The Future Of Fintech B2B?, Jan 2024
- Plaid, Tech Talk: Unlock the Future of Banking Personalization to Win and Retain Customers, Jul 2024
- Sinch, 5 Digital Banking Trends You Should Know for 2024, Feb 2024
- Federal Reserve Bank, Bankers Name Tightening Margins, Cybersecurity as Top Challenges, Nov 2023
- Finextra, Financial Services Top Target for DDOS Attacks, Mar 2024
- PYMNTS, More Than Half of Bank Consumers Want Better Transaction Security, Mar 2023
- Entersekt, Visible vs Invisible Banking Security: The Ongoing UX Debate, 2024
