Digital Banking: Exploring the 2024 Trends – +2Brains
This year marks a turning point for digital banking, poised at the forefront of a technological revolution driven by artificial intelligence (AI) and fintech innovations.
We stand at a defining moment where the operational, relational, and interactive paradigms of banks are undergoing a significant transformation, paving the way towards a digital banking landscape that is more inclusive, personalized, and sustainable than ever before.
Furthermore, here are the trends set to shape the financial industry in 2024:
Artificial Intelligence: Personalization and Data Analysis
AI has firmly established itself as a central element in the digital banking transformation, offering solutions that enhance operational efficiency and data-driven strategies for a personalized customer experience.
Understanding customer behavior to deliver superior products and services has become essential. Fintin, a Polish fintech, exemplifies success in this arena with its modular, flexible solution leveraging natural language processing for financing services. Through customer data analysis, Fintin delivers personalized services based on user interactions.
Moreover, AI plays a crucial role in boosting companies’ operational efficiency, with its implementation potentially increasing productivity by 22% to 33%, according to Accenture.
OCBC Bank in Singapore, a fintech leader in generative AI, showcases the benefits of adopting an intelligent chatbot, which has enhanced employee productivity by 50%. The bank also uses AI to make over four million daily decisions across risk management, customer service, and sales.
Banking Convergence: Collaborating for Financial Inclusion
Contrary to predictions that fintech and new technologies would replace traditional banking, the reality has seen a productive collaboration among these entities, neobanks, and cryptocurrency platforms, fostering a more diverse financial ecosystem set to trend in 2024.
This convergence is crucial for enhancing the accessibility of financial products and services, allowing a wider array of individuals and businesses to benefit from innovative financial solutions.
A notable example of digital banking evolution is MACH, our client, which has solidified its position by offering a platform that simplifies online payments and transactions. Initially enabling users in Chile to send and receive money via mobile devices and manage prepaid cards, MACH has since expanded its services, transitioning towards a neobank model and enriching its users’ financial experiences.
Cybersecurity: A Fundamental Pillar of Digital Banking
The rise in digital transactions has elevated cybersecurity to a top priority for the banking sector. AI’s real-time transaction pattern analysis can identify unusual behaviors indicative of fraud.
For instance, if a customer’s transactions suddenly originate from an unfamiliar location, AI can flag this as suspicious and take preventive actions, such as blocking the transaction or requesting additional verification.
In particular Mastercard’s “Decision Intelligence” AI system exemplifies this, evaluating each transaction’s legitimacy in real-time to enhance fraud detection accuracy while reducing false positives.
Biocatch is another platform utilizing behavioral analysis to detect user behavior anomalies that could suggest fraud attempts or unauthorized access.
Investments in advanced security technology are vital for protecting client information and assets in the financial industry.
E-commerce and Mobile Payments Surge
Digital payment projections for Mexico in 2024 foresee an expansive and diversified landscape, with transactions expected to exceed 100 billion dollars.
This growth will primarily be driven by e-commerce, anticipated to account for nearly 80% of total transaction volume, with mobile payments contributing around 18%.
The adoption of contactless payment technologies like Near Field Communication (NFC) will play a significant role in 2024, facilitating “tap-to-pay” transactions secured through biometric data or PINs.
Additionally, The “Buy Now Pay Later” (BNPL) model is another emerging trend, allowing consumers to make immediate purchases and defer payment. This not only provides buyers with flexible payment options but also offers businesses benefits such as service diversification, revenue generation, data analytics, customer profiling, and loyalty building.
Sustainability: A New Horizon for Digital Banking
The banking sector is uniquely positioned to advance sustainability and act as a potent agent of societal change.
Digital banking is leading the way towards a greener future through an internal cultural shift, viewing sustainability not as an addition but as a comprehensive operational transformation.
This involves a commitment to environmental education and training for leaders, coupled with stringent monitoring of their own and their partners’ emissions, adopting practices that ensure a positive and lasting environmental impact.
Taking concrete actions reflecting a genuine commitment to sustainability, banks have the opportunity to innovate by introducing “green” financial products aimed at both individual consumers and corporate clients, facilitating their transition to more sustainable operations.
German bank KfW stands out for its impact on environmental conservation and social well-being, supporting renewable energy, energy efficiency, and sustainable urban development projects.
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These trends indicate that 2024 will be a year of change and new technologies in digital banking, presenting a significant opportunity to get ahead in the market and become an industry leader.
If you’re interested in how we can help you achieve this, contact us for a deeper discussion about your company’s needs.