Top 7 Consumer Trends in Digital Banking in 2024

The number of digital banking users in the US grows year-on-year, expected to reach $217 million by 2025 . It nudges non-fintech companies to embed banking features to meet users' need for all-in-one apps.

Besides embedded fintech, Binariks software development company follows other digital banking trends in our projects . Discover more about them below to know what consumer banking technology will dominate in 2024.

Top 7 consumer trends for the digital banking industry

The 2024 year will not witness any unexpected consumer trends in banking. After all, this field is already highly digitized and quickly adopts most tech innovations as soon as they appear.

The main change is that consumer banking technology trends that started several years ago are becoming more powerful. Since 9 in 10 Americans use some form of digital payment , the ultimate quality of fintech services becomes decisive. Besides, financial functionality appears in software across other industries, like e-commerce stores or insurance platforms. Such a tendency also affects global consumer trends in digital banking.

So here are the leading retail banking technology trends businesses will invest in in 2024.

1. The increasing role of online customer experience in banking and other apps

After the pandemic, 41% of US bank customers have become digital-only , up from 30% in 2020. It means your app or web platform is their only point of interaction with your business. If you make the experience pleasant and smooth, the customers will stay with you. If not, you may never see them again.

Apart from intuitive app design and functionality, modern consumers demand friendly staff, 24/7 service, fast response, personalized experience, and loyalty programs.

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Fortunately, quality online banking with automation capabilities can cover most of these CX needs. For example, you can power online banking with a chatbot to provide support and collect requests 24/7. It would also meet the need for fast service and personalized experience.

2. Popularity of the Buy Now Pay Later (BNPL) model

According to the McKinsey survey , 15% of US consumers are ready to use the BNPL model in 2022. It's a 4% increase compared to 2021. In addition to allowing consumers to pay for purchases later, the BNPL option benefits businesses. It increases sales and customer engagement, especially in online stores.

Such undeniable BNPL advantages make it one of the top customer tech trends in the banking industry in 2024. We are likely to see more websites offering this payment approach to consumers. The variety of fintech services providing solutions for easy BNPL payments is also likely to increase and become more versatile. Affirm, Klarna, Afterpay, and Uplift already support Buy Now Pay Later transactions.

3. Digital wallet expansion

Over two-thirds of US residents will have a digital wallet within the next two years, while many will own three or more digital wallets simultaneously. It's a significant shift from wearing leather wallets with credit cards. It's also a challenge for businesses that must meet consumer demand for new payment methods to stay competitive.

So far, people prefer bank-provided digital wallets – 54% of responders would get a wallet from their banks. But using a digital wallet from a smartphone manufacturer/tech startup or retailer is also a growing trend. So if you run a large retail platform, consider building a custom digital wallet.

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4. Omnichannel engagement

Despite the accelerated transition to digital banking, 50% of consumers want to retain branch services . Hence, if you are not a neobank and still have physical branches, it may be too early to go fully digital in 2024. Instead, omnichannel is an optimum approach.

You should be able to serve customers at physical locations, through a web platform and mobile app at the same time. This combination allows consumers to pick the most convenient interaction.

But mind that omnichannel engagement means that an individual should be able to get all services regardless of the channel. That's why digital banks must power web and mobile apps with rich functionality. Non-financial businesses must also make all services, including payments, equally available across channels.

5. AI is a must-have

The times when artificial intelligence was a novelty ended. In 2024, AI will be among the essential consumer banking technologies used to detect fraud, enhance risk management, implement automation, and serve consumers, of course. 81% of banking IT executives agree that AI adoption will separate winners from losers. Behemoths like J.P. Morgan already have AI-powered assistants that adapt to the customer's behavior over time to make insightful recommendations.

Thus, if you develop an application with banking features, always consider enhancing it with AI. You can build a chatbot, enable personalized user recommendations, and find many other uses to improve your functionality.

6. Big data and analytics capabilities

Data is a direct path to understanding customers and personalizing services. That's why companies keep building systems with advanced analytics. Fintech market leaders rely on big data processing to generate detailed customer profiles, offer tailored loans, research spending patterns, and make informed lending decisions, among other uses.

Adopting these consumer trends in digital banking considerably saves time per customer request. It also ensures more customized services to consumers and strong customer-centricity.

7. Embedded finance

Customer trends in banking affect other fields – especially those that serve consumers and complete a large volume of transactions daily.

Embedded finance, which means powering non-fintech products with financial features, is one of the common cases. Healthcare providers, ecommerce stores, retailers, and other businesses embed payment, banking, insurance, and lending functionality into their products. It allows users to get financial services without leaving a non-fintech platform.

Today embedded finances account for $2.6 trillion (nearly 5%) of US financial transactions. By 2027, the volume will exceed $7 trillion. Given that such consumer trends in digital banking are gaining popularity, we will soon have more apps with embedded fintech features. Stripe, Resolve, jaris, and Plaid are just a few solutions that allow you to embed payments.

How to improve the customer experience in digital banking

Apart from tech innovations, customer experience in banking can significantly improve with some reasonable best practices. Follow the rules below to provide customers with better banking services in your app.

• Regularly collect feedback from customers and the help desk. Let people speak about their experience while using your online banking. Feedback is a true gift you must use to improve your software.
• Integrate live chat and employee feedback. It's another tech hack to address customer requests more precisely and evaluate the work of support.
• Simplify all basic operations. Account opening/closing, transactions, report generation, and card/account blocking must take as few steps as possible. It improves the usability of your platform and encourages people to keep using the app.
• Analyze the main issues customers face. Find out the main problems of end-users to realize how digital banking can fix them. For example, if you detect that many people have questions about international transaction fees, ensure your chatbots or FAQs can answer them.
• Analyze customer behavior. Check how users navigate your mobile and web products to detect any preferences and bottlenecks. These findings will guide you on what to improve and how.

Smooth customer experience requires a multi-faceted approach. It means you must both upgrade your tech solutions and adopt the field-proven CX practices.

Allocation of budgets to consumer tech solutions

Digital transformation is a lengthy and expensive process. Hence, you will need to prioritize expenses and implement innovations gradually. So how to decide where to start?

Based on our experience, thorough requirement analysis is an essential first step. Only by researching the market and your legacy software can you clarify how to transform your business. If you have never done it yourself, you can ask Binariks to assist.

Overall, mobile and web app development is the easiest way to enhance your consumer experience through online banking. You can also connect third-party API to connect an additional feature missing in your software. API integration is quick and budget-friendly. The custom development of AI functionality and embedded banking is more pricey and requires considerable long-term investment.

Our experience

Binariks offers banking software development services for startups and established firms undergoing digital transformation. We can run a business analysis for you, assist with specific tasks, or assemble a dedicated team focused on your project.

Our engineers specialize in mobile banking apps, online banking platforms, RPA, big data, and data warehouses. Contact us to get help in any of these domains and check the completed projects to know how we work.

The listed consumer banking technology trends reflect what will happen in the industry in 2024 and beyond. They also show the functionality users will look for in financial and other products. Even though you don't need to follow them all, adopting some may significantly boost your business.

Binariks is a banking software development company that can assist you with developing or integrating online banking software. If you need an in-house engineering team, let us be a remote one for you. The price-quality ratio is the best one.