Industry News

The Future of the Banking Industry

Although the last 18 months have been difficult for banks, 2024 banking trends include a sense of pragmatism about the reality of the new normal. A report from West Monroe, a digital services firm, explores four key areas for the banking industry in 2024, offering insights and projections for what promises to be a transformative year:

Higher interest rates and a fragmenting industry. As uncertainty around interest rates persists, banks are facing strategic decision-making challenges. This environment is augmented by, and fueling, industry fragmentation, forcing banks to adapt to maintain financial stability and a competitive edge against new industry players.

The challenging landscape for regional banks. Regional banks are facing an identity crisis amid anticipated consolidation, deposit outflows and stricter regulations. These factors necessitate a strategic overhaul to differentiate and survive in a competitive market. Regional banks must embrace new technologies and enhance their data operations to stay competitive and comply with evolving regulations.

The changing risk environment. In the wake of Silicon Valley Bank, a stricter regulatory landscape is emerging, requiring greater transparency and more comprehensive data operations from banks. Institutions must pivot toward optimized data management and digital solutions that meet modern consumer needs, using innovation to ensure regulatory compliance and risk mitigation.

Opportunities for using digital tools and artificial intelligence. Transformational technology changes are looming in the banking sector, with artificial intelligence (AI) poised to change operations, customer relations and risk management. Banks must strengthen their foundational data capacities and embrace AI not just as a tool but as a means of shifting their overall culture toward a full embrace of digital to improve the customer experience. 

Download the full report at: 2024 Outlook: The Future of the Banking Industry | West Monroe

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