How successful banks are preparing for 2024’s rapidly changing landscape
Just six weeks into 2024, the banking industry is getting ready for the upcoming battles: the CFPB has issued a new proposed role on overdrafts, the Federal Reserve has provided insights into its rate policies for 2024 and banks have reported full-year 2023 earnings. But even with these developments upending some projections, certain trends are proving fundamental.
Competitive forces in the banking industry appear to be changing more rapidly than ever. More money in motion, lower switching costs, a rising cost of funds, migration to digital, increased regulatory scrutiny and the rise of AI are converging, all within a backdrop of economic and socio-political uncertainty.
Banks and credit unions will face tough investment choices in placing the right bets in a fluid environment. While the winning hand may not reveal itself for some time, one prediction seems certain — we will see greater separation between leaders and laggards in banking over the next 18 to 24 months.
While most of the industry will seek to drive operational efficiencies and cost reductions in 2024, progressive banks are opportunistically increasing investments in key capabilities that will create advantage. History shows that this advantage can become more pronounced in challenging times when competitors are simply hunkering down.
What priorities should rise to the top in the crucial period ahead? Here are four key areas that banks should consider elevating on their agendas.
continue reading »
