Digital Banking Trends for 2022

Digital banking has really taken off in the last few years. In a crowded marketplace, the key to success lies in increasing lifetime customer values by moving beyond the role of being just a ‘virtual vault’ and to a role of being a smart, proactive and data-driven financial partner/advisor. With that, let’s take a look at the 5 most important digital banking trends to watch as we move into a new year:

  • Consumers being more willing to switch to digital-only banking – strong reviews from existing customers has given consumers more confidence to switch to digital-only banking. In fact, a recent survey found that 62% of U.S. consumers are ‘somewhat’ or ‘highly likely’ to switch to a digital-only bank in the near future. This figure rises to 77% among millennials surveyed.
  • Growing interest in environmental, social and governance (ESG) principles – financial institutions are facing strong demands from both consumers and regulators to do their part and be more environmentally and socially responsible. This has led to an increase in the number of available ESG products in the market, including green loans and mortgages.
  • Greater focus on financial wellness – as financial wellness and financial education become a bigger topic in public discussions, financial institutions have a good opportunity to use digital tools to deliver comprehensive financial wellness support to their customers.
  • Data-Driven Personalization for Personal Interactions – as consumers come to expect higher levels of personal interactions (especially from their financial institution), data-driven solutions that deliver a more personalized experience (beyond personalized digital self-service solutions) and help consumers engage better with their finances will become more and more mainstream.
  • The ‘Netflix effect’ in banking – modern consumers want experiences where automatic recommendations are generated (and updated) based on individual patterns. Just as Netflix learns more about individuals based on their viewing habits to deliver recommendations, financial institutions need to develop ways to learn about individuals and their spending habits to deliver personalized recommendations that will help them do better in their financial lives.