.Banking Trends for 2023 appears to be a year full of economic uncertainty. After a bullish 14-year stretch of growth and economic expansion, disrupted only by-the financial ramifications of Covid-related closures and supply chain setbacks, the economy now looks to be slowing. Interest rates have risen dramatically in an effort to curb runaway inflation. Businesses and individuals are preparing for a year that could see anything from minor economic slowdowns to a major recession.
With these considerations in mind, the landscape for earning and retaining customer trust is more competitive than ever. Consider the following trends when thinking about your financial institution’s strategy this year.
Banking Trends-An Evolving Core Customer Base
Not only have Millennials taken center stage as financial institutions’ core demographic, but Gen Z are now serious players. Especially when banks and credit unions consider the lifetime value of a customer, and gaining that Gen Z loyalty can be difficult.
Notably, these generations have had varying experiences that shape their behaviors. Specifically, Millennials have grown into technology and have learned to adopt to the invention of smartphones.
Gen Z grew up with more advanced technology, and have higher demands and expectations for tech fluency. Additionally, a year of economic uncertainty will undoubtedly be received differently from the two generations, where a Millennial generation that entered the job market in the midst of the 2009 economic collapse will react differently than Gen Z, that has largely seen an employee-centric job market to date.
Banking Trends-A Two-Way Street for Customer Data
Financial institutions must work to find a mutually beneficial relationship with customers and their data. Specifically, in the midst of heightened cybersecurity concerns and investment in the protection of customer data, financial institutions must convey to customers that their data is secure, that it’s worth sharing, and that their willingness to share information can help create a better customer experience.
Obviously, once financial institutions achieve buy-in, delivering on their word is extremely important. Customized experiences and relevant offers/solutions convey to customers that their financial institution is listening to them and adding value to their relationship.
Banking Trends-Sophisticated Payment Options
Embedded finance and enhanced payment options were major trends of 2022, and in 2023, those options will continue to become more refined and synonymous with the purchasing experience. Financial institutions will work to co-brand payment options and make the most of these opportunities for retail partnerships.
Economic Uncertainty
Above all else, economic uncertainty is likely to characterize 2023. The macro-economic environment doesn’t currently point to a clear path forward, which puts decision-makers in a difficult position to know how to proceed. Those with responsibility for leading their organizations will look for information and guidance in the weeks and months to come.
