Lifestyle banking, super apps and AI – Pablo Alaejos, Designit predicts what the banking sector will see in 2024

the banking sector has once again seen a year of disruption, innovations and shifts. So what will 2024 have in store?

Global experience innovation consultancy Designit’s Design Director, Pablo Alaejos has had a look into his crystal ball, and has identified five major predictions for the sector next year:

1. The rise of lifestyle banking

“Banks are in a strong position to start winning customer loyalty by empowering consumers to seamlessly live the life they want. Many are already doing so, with the likes of Revolut offering a plethora of lifestyle perks through its Ultra Plan, while the partnership between AMEX and British Airways and its Avios points scheme has been a staple of the industry for some time.

“2024 will see this go further, however, with access being offered to consumers outside of the traditional big spender and frequent flyer groups.

“Banks are going to be investing heavily in in-app functionality to allow customers to “live their best lives.” Whether that’s integrating direct access to your favourite brands and services, providing insights on how your spending contributes to your carbon footprint, or helping you build credit as a teenager.

“Next year is when banks are going to make life easier.”

2. See you on the super-app?

“Elon Musk might actually be onto something…hear me out.

“Long has the Tesla CEO been an advocate for the super-app, with the rebranding of Twitter to X, being part of his masterplan to bring everything under one banner and to create a super-app.

“Super-apps, a staple in Asia, will provide customers with non-banking services as part of a one-stop-shop platform, making day-to-day life that much more convenient. A welcome tonic to the cluttered nature of many of our smartphone’s home screens.

“And Banks are already launching their own super-apps with Avo, by Ned Banks, giving their customers easy access to a variety of day-to-day essentials, e.g., banking services, healthcare, and entertainment – all in one place.

“I wouldn’t be surprised if we saw more mainstream banks in 2024 using their legacy status to form partnerships with major brands to sit on these super-apps, giving their customers a frictionless experience.”

3. AI will allow the most personalised experiences yet for customers

“A one-size-fits-all approach hasn’t worked for some time, but the financial sector is still lagging behind when it comes to truly personalised experiences and products. Artificial intelligence, if used correctly, could be about to change all that.

“By leveraging the power of AI, banks can more intelligently price products and services within their mobile apps, increasing customer loyalty and reducing churn. In a time where customer attention is the most valuable commodity, the winners of 2024 will be those that can offer a seamless ’life on demand’ banking experience from the tap of a button.”

4. The return to the metaverse could be on the cards

“Physical branches may be on the decline, but next year has the potential to be the year in which banks start investing again in digital real estate and opening branches in the metaverse.”

“Some already have. HSBC has bought land on The Sandbox, and JP Morgan Chase has had a branch in the metaverse since 2022.

“For the most part though, the technology has received a lot of hype but has yet to deliver on its promise. However, this time could be different. The hardware to access these worlds is improving with the early 2024 launch of Apple’s Vision Pro headset set to introduce some much-needed quality improvements to these AR/VR experiences, raising app expectations among consumers that banks will need to meet. There is also the fact that early adopters have a better understanding of the capabilities, and therefore the limitations of these digital worlds, meaning that their reentry is going to be more strategic.”

“Getting these banking metaverse experiences right will allow customers to ask representatives that were once solely part of the physical branch experience for help and advice, in a way that caters to those who are more responsive to these digital landscapes.”

5. Value driven products will entice new banking customers

“Recent research by the US Bank has shown that younger generations are willing to accept lower returns on their investments if it aligns with their values and beliefs. So, we are going to see the continued growth of ESG investments, which are projected to reach $33.9tn by 2026.

“For banks, this means enabling customers to invest in companies that match their morals, beliefs, and values as well as their passions. Expect to see a rise in unique portfolios such as LGBTQIA+ led companies or ones that are entirely carbon neutral, as banks look to attract young customers who want to put their money in companies they believe in.”