Banking Outlook 2024: Tornados, Hurricanes and Typhoons, Oh My!
Banks are in for more change in 2024 than most can comfortably deal with!
All banks face big choices ahead. It’s not enough to say that banks must “go digital”; bankers know that by now. The problem isn’t just that there is no straight path to a certain digital future and their very business models are being threatened.
It’s almost enough to make you feel sorry for bankers. I don’t. In the decade prior, most bankers watched on the sidelines as fintech and tech passed them by! Still, it should be good for consultants like Samlink!
👉TAKEAWAYS: Imperatives for 2024
Business Model Innovation
Banks can no longer rely on traditional business models. The integration of advanced technologies, especially AI, is pivotal in transforming these models for increased efficiency and enhanced customer value.
Ecosystem platforms create value by facilitating collaboration with partners sharing data insights, and capabilities, thus multiplying potential value and enhancing the ability to anticipate and meet client expectations.
Banks are aiming to modernize their outdated systems by integrating modern, cloud-native core providers and a network. Partners facilitate quicker market entry and better investment returns while minimizing risks and complexities.
Cost Management and Operational Efficiency
This is ongoing, but it’s different now in amid a digital skills gap and business model innovations.
Reimagining Business Architectures
In response to digitalization banks are shifting from traditional back-office-focused operations to more client-centric models, leveraging technologies like cloud, AI, and automation.
Emphasis on Digital Innovation and Customer Experience
Banks are intensively focusing on digital innovation and enhancing customer experience as key drivers of competitiveness and growth.
Great read by Samlink that lays out in no uncertain terms how much of a mess banks are facing in 2024. Kudos to authors Pål Krogdahl and Arto Sorvoja.
The guest contributions from Brett King, Jim Marous, Leda Glyptis, Ron Shevlin, and me also make for great reading!
What Pal and Arto do better than the larger consulting firms lay out the enormity of problems banks face in 2024. This isn’t just the more narrow call to “go digital” that banks faced a few years ago during the pandemic.
Now, banks are threatened due to fundamental changes in the business with a shift towards a platform-based paradigm. This requires banks to switch from a predominantly product-centric approach to customer-centric while interacting with fintechs, tech companies, and other financial service providers.
In short, the number of moving parts the bank has to deal with is growing exponentially. With a platform model, they are being forced to focus once again on the client, a skill long forgotten, but now have to do it with a full cast of new digital characters.
“Digital maturity” will be big in 2024 and banks are going to have to learn how to grow up in a hurry.