Banking and Payments Predictions in 2023 – Thematic Intelligence

Banking and Payments Predictions Market Overview

2023 will test the economic and technological underpinnings of all direct-to-consumer and B2B propositions in banking, payments, and wealth management. With far less venture capital (VC) money sloshing around the sector, investors will expect far shorter, more direct paths to profitability. Incumbent banks will be under pressure to limit non-performing loans.   A distressed fintech sector will present highly favorable M&A opportunities for incumbents looking for a step change in capabilities and a blueprint for a new operating model. The Banking and Payments Predictions report is a multi-theme report covering 20 themes, drawn from banking, payments, and wealth management.

Banking and Payments Predictions – Top Themes

The top themes in the banking and payments market are artificial intelligence (AI), conversational platforms, cloud, cybersecurity, financial wellbeing, robo-advice, social media, generation hashtag, digital banking, environmental, social, and governance (ESG), SME banking, mobile payments, instant payments, online payments, data privacy, open banking, user experience, digital lending, strategic partnerships, and blockchain.

Artificial Intelligence: AI will be the single most disruptive technology theme within financial services because it has the most wide-ranging potential applications across mission-critical business areas. Those banks that do best in AI will have a holistic strategy that cuts across business lines, products, departments, and partners, enabling them to quickly identify and deploy the most proven use cases for maximum customer impact. Success in AI will require judicious investments in related areas, such as cloud and robotic process automation, to harvest the transformational potential of AI across all dimensions of the customer experience.

For more insights into the impact of AI on the banking and payments industry, download a free report sample

Conversational Platforms: Chatbots will support multi-channel and super-app engagement. They offer important flexibility and agility at a lower cost. This is especially true in the context of super-app strategy, where chatbots will be an important weapon against disintermediation. However, reliance on chatbots will bring added risk for distressed consumers. There is plenty of anecdotal evidence of chatbots misfiring at moments of heightened emotional stress.

Satisfaction with Chatbots in Banking, 2022 (%)

For more insights into the impact of conversational platforms on the banking and payments industry, download a free report sample

Cybersecurity: Tech spending on cybersecurity will grow. Banks are unleashing the power of digital technologies to predict and prevent cyberattacks before they happen. Cybersecurity technologies will help banks shore up their reputation as trusted and secure providers as they digitize amid increased openness. Ransomware attacks continue to be a popular talking point and are growing in sophistication. Geopolitical tensions in 2022 put many companies on high alert for politically motivated cyberattacks, while deteriorating economic conditions will give other would-be attackers heightened motivations.

Survey on Online Security of Digital Only Banks, (%)

For more insights into the impact of cybersecurity on the banking and payments industry, download a free report sample

Generation Hashtag: Generation Hashtag, which refers to a group of people born between 1991 and 2005, differ the most around their openness to non-traditional providers, willingness to share data, satisfaction with ESG issues, desire for personalization, and reliance on mobile devices. Openness to non-traditional providers, including telcos, Big Tech, and new digital banks, is twice that of the general population, and that number has doubled in the last 24 months alone, which is a testament to the velocity of change we expect to continue across 2023.

Activities Conducted on Smartphone Daily, 2022 (%)

For more insights into the impact of Generation Hashtag on the banking and payments industry, download a free report sample

Digital Banking: For purist digital banks without a physical presence, the potential size of the market has contracted in the last half of a decade, while the number of new digital banks has multiplied many times. In 2023, we expect more banks to offer some type of physical presence, but with great diversity in those approaches such as highly digital, hybrid, purely human, etc. Declining barriers to entry, alongside ongoing consumer interest in value alignment, will see ever more segmented new digital banks.

Survey on Usage of Banks Without Physical Presence, 2022 (%)

For more insights into the impact of digital banking on the banking and payments industry, download a free report sample

Banking and Payments Predictions Overview

Scope

Success in AI will require judicious investments in related areas, such as cloud and robotic process automation, to harvest the transformational potential of AI across all dimensions of the customer experience.

Millennials and Generation Z are the key demographic for mobile-first investing and robo-advice, which is seen by many new entrants as a launching pad for a lifelong wealth relationship. However, this will continue to be a very difficult market for new entrants.

The most successful mobile payment systems in 2023 and beyond will be those that utilize the versatility of a mobile P2P or mobile commerce system to achieve omnichannel reach, as services in Asia-Pacific have already done.

Reasons to Buy

• Understand the most disruptive themes in banking for 2023.
• Access key predictions per theme to help guide strategy and tech decisions at your institution.
• Understand which individual firms are best placed to “win” or “lose” amid predicted thematic impacts.