What is the future of digital banking 2023?
In 2023, banks will continue to embrace cloud computing as they seek to improve operational efficiency and reduce costs. They will also use cloud computing to improve the security of their systems and to provide customers with faster, more reliable services.
The Future of Digital Banking and Emerging Technologies
The emergence of new technologies, such as 5G and IoT, is opening up more comprehensive access to banking apps. Quantum computing has the potential to transform the industry even further.
Growing deposits will be a priority in 2023. Banks' concerns over small business deposits soared to 72% from 41% in 2022. For credit unions, retail deposits topped the list, skyrocketing from 18% in 2022 to 70% in 2023.
The trends in fintech 2023, such as AI, blockchain, and personalized services, will likely remain influential in the industry. AI's role in enhancing efficiency and security, blockchain's impact on transparency, and customized services meeting consumer needs will continue shaping tech finance.
In the Digital Banks market market, the projected Net Interest Income worldwide is set to reach US$822.5bn in 2024. Looking ahead, it is expected that the Net Interest Income will display an annual growth rate (CAGR 2024-2028) of 10.34%, leading to a market volume of US$1,219.0bn by 2028.
Without the cost of establishing and operating physical branches, online banks can redirect those funds elsewhere, such as yields offered on savings products or ATM fee reimbursem*nts. Most of the top savings account rates are offered by online bank accounts.
The future of banking appears to be one of complete accessibility and inclusivity. Peer-to-peer payments will be smooth regardless of where people bank, making it commonplace to send money to pals, recover shared expenses, or even just split a bill.
It doesn't make sense to take all your money out of a bank, said Jay Hatfield, CEO at Infrastructure Capital Advisors and portfolio manager of the InfraCap Equity Income ETF. But make sure your bank is insured by the FDIC, which most large banks are.
The overall pace of bank branch closures slowed in 2023, but certain banks still slashed the size of their brick-and-mortar networks substantially. U.S. banks closed 2,118 branch locations between January and the end of October, according to data from S&P Global Market Intelligence.
Over a few weeks in the spring of 2023, multiple high-profile regional banks suddenly collapsed: Silicon Valley Bank (SVB), Signature Bank, and First Republic Bank. These banks weren't limited to one geographic area, and there wasn't one single reason behind their failures.
What are the top financial predictions for 2023?
Key takeaways. Global inflation looks set to cool but will likely remain above comfort levels at 3%. With persistently high inflation, further tightening is likely to occur. A synchronized global recession may be the consequence, hitting sometime before the end of 2024.
- Winter: the Guardian gets hit with a ransomware attack.
- Spring: The godfathers of AI speak out.
- Autumn: Binance stumbles.
Trend: Generative AI
This is something we're likely to see more of this year. Specifically, the influence on fintech and the application of generative AI on chatbots is expected to grow this year through banking technology, such as apps and other online money services, which could produce new revenue streams.
What does digital banking mean? Think of it as online banking but taken to the next level. It incorporates all the familiar features of online banking, such as checking account balances or transferring money, and integrates even more tools and services.
To ensure the success of any digital transformation initiative, there are key factors that must be considered, including customer-centricity, faster time-to-value, minimum viable product releases, modernization of legacy systems, and workforce training and enablement.
To be a good digital bank, you need to appreciate that you can't be everything to everyone. Defining your focus is critical to a successful digital bank strategy. How would we do that? By working on gaining deep insights into what problem(s) you want to solve and creating a clear banking value proposition around it.
An online bank not only typically provides a better virtual experience, but you will likely also get fewer fees and higher rates on savings accounts. Of course, the downside is that you don't get that access to in-person customer service, which some people might prefer.
If they're FDIC-insured, online banks are as safe as traditional brick-and-mortar banks in many ways. You can also take steps as a consumer to ensure your account is as protected as possible when banking online, whether you bank with a brick-and-mortar or an online bank, also called a direct or digital bank.
- Atom Bank.
- Varo Bank.
- Monzo.
- N26.
- Revolut.
- Chime.
- SoFi.
- Nu Bank.
It remains unclear whether traditional banking will become extinct soon; however, what is certain is that its role will continue to evolve if it is going to survive in this ever-changing landscape of finance.
What is the next big thing in banking?
Like digital, the Age of AI is likely to have a transformative impact on the industry, affecting roles in virtually every part of the bank. Not only is the rapid adoption of gen AI the most important trend for banks in 2024—it's also shaping the other nine trends.
Experts say if the U.S. moved forward with creating a digital dollar, today's banks would be a thing of the past. Plus, some cryptocurrencies wouldn't be worth much while competing against the stability of U.S. digital money.
If your bank fails, up to $250,000 of deposited money (per person, per account ownership type) is protected by the FDIC. When banks fail, the most common outcome is that another bank takes over the assets and your accounts are simply transferred over. If not, the FDIC will pay you out.
While the government may not be the one directly taking the money out of someone's account, they can permit an employer or financial institution to do so. If someone plans for debt and other required payments properly, chances are that money won't ever have to be removed from their account without their permission.
| Bank | Forbes Advisor Rating | Products |
|---|---|---|
| Chase Bank | 5.0 | Checking, Savings, CDs |
| Bank of America | 4.2 | Checking, Savings, CDs |
| Wells Fargo Bank | 4.0 | Savings, checking, money market accounts, CDs |
| Citi® | 4.0 | Checking, savings, CDs |
