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  • Jozef Gajdoš

Digital Banking Trends: What to Expect in 2023 and Beyond

With digital banking and financial technology evolving fast and customers turning to their mobile phones for everyday banking, the need for seamless digital experiences will only increase. In this rapidly changing landscape, it’s critical for banks to stay ahead of the curve. In this blog post, we will discuss the top digital banking trends that are expected to dominate the market in 2023 and the coming years.

Banking trend #1: Mobile banking

The popularity of mobile banking has grown in recent years also due to the COVID-19 pandemic. Since then, many customers conduct banking transactions on their smartphones thanks to the convenience and ease of use. The global mobile banking market had a value of $715.3 million in 2018 and is expected to reach $1,824.7 million by 2026. That corresponds to a CAGR of 12.2% during the forecast period.

The adoption of mobile banking is on the rise also in Europe. A UK study conducted in 2021 revealed that the use of digital banking services has increased since the pandemic began, with the highest increases being for the use of mobile banking apps. Two-thirds (66%) of respondents who have used digital banking services more frequently since the pandemic began reported they have also used mobile banking apps more frequently.

Banking trend #2: Artificial intelligence

Artificial intelligence (AI) is transforming how banks serve their customers, as they can provide personalized recommendations and a convenient experience. These technologies make it possible to better understand customer needs, identify solutions, perform faster analyses, and develop effective business strategies.

This personalized approach has the potential to help banks differentiate from their competitors and deepen customer loyalty. Almost half of the banks surveyed (46%) believe that implementing AI into their organization’s products and services will help them achieve their business objectives “to a large extent”.

Banking trend #3: Blockchain

Blockchain is a technology that stores and records data so that multiple parties can reliably share real-time access to the same data while reducing concerns about security, privacy, and control.

This technology enables banks to record and track the details of a transaction, including the amount, origin, destination and time. It means faster, less expensive and more secure transactions.

The market for blockchain solutions for the banking sector and financial institutions was expected to be 0.28 billion US dollars in 2018. The use of technology in the financial sector is predicted to grow in the next few years, reaching a market size of around 22.5 billion US dollars in 2026.

Banking trend #4: Transparency and open banking

Transparency can help banks strengthen relationships, build loyalty and gain a competitive edge in the evolving banking landscape. Research shows that trust is crucial in the financial industry. A 2021 survey by EY identified trustworthiness and personal relationships as the most important factors driving trust in primary financial relationships.

According to another study, 39% of respondents said they value transparency about how the company shares data, and 44% want organizations to respond to security breaches by being transparent and taking visible action.

The findings highlight the importance of openness for banks in establishing trust with customers. Trust is essential for the widespread adoption of open banking, which involves account holders’ permission to share their data with third-party providers.

Banking trend #5: Cloud computing

There has been significant growth in the use of cloud computing in digital banking due to several benefits. A 2021 survey among the U. S. banks found that the top three benefits of cloud computing are:

  1. increased scalability

  2. recovery and continuity

  3. lower total cost of ownership

Accenture surveyed 100 worldwide banks in 2021 and discovered that only 8% of workloads are operated in the cloud, but this percentage is likely to rise within two years. Overall, cloud computing is poised to transform how banks deliver services and operate their businesses in the following years.

Banking trend #6: Privacy and security

As digital banking grows in popularity, customers are now more exposed to the threat of losing money than ever before. As a result, cybersecurity is quickly becoming a top consumer requirement.

According to a 2019 study, 58% of Amercans would stop using a financial institution’s services if they faced a privacy breach. Therefore, banks need to invest in strong security systems to identify fraud, avoid cyberattacks, perform security audits, and protect customers from phishing attacks.

Banking trend #7: Collaboration with fintech companies

Banks are increasingly collaborating with fintech firms to integrate digital processes into their operations and provide their consumers with innovations. Global banking and insurance revenue pools are estimated to reach $21.9 trillion by 2030, representing a 6% CAGR. Fintechs are expected to play a significant role in this expansion.

World Retail Banking Report 2022 revealed that about 75% of customers are attracted to FinTech competitors that offer fast, easy-to-use products and experiences available anytime and anywhere at a low cost. This only proves the huge potential of the fintech segment.

The banking industry is undergoing a significant transformation where digital technologies have a crucial role. Mobile banking, AI, blockchain, open banking, cloud computing, privacy and security as well as collaboration with fintechs are just a few of the digital banking trends reshaping the industry in 2023 and beyond.

At Axelgate, we were also involved in several pioneering digital banking projects, such as boon.PLANET. And we are still looking forward to new challenges and trends that open up an exciting future.


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