Banking and Payments Experts Share Sector Forecasts for 2024

Douglas Blakey canvasses over 200 industry leaders to get their expert opinions on prospects for the banking and payments sectors in 2024.

Alistair Brown, VP, Open Banking and Payments, EPAM Systems

Predicting the future financial and banking landscape is always difficult. However, there are some clear developments for 2024, FedNow will likely dominate payments in North America. FedNow is an instant payment service created by the Federal Reserve for depository institutions in the US, which permits individuals and businesses to send and receive money.

With the introduction of FedNow, 2024 will see even more obligatory regulatory changes than usual, causing tier-one banks, already under enormous pressure, to become frustrated. From a macroeconomic perspective, 2024 will also be challenging due to several factors, notably the ongoing Middle East and Ukraine conflicts. Although there will be exceptions, many will lose their jobs, and companies will lose value.

Open banking is an interesting trend for 2024 because it will mean more flexibility. And, if we get it right, the customer should be the one who wins.

Dennis Joosten, Senior Director, Banking, EPAM Systems

One particular regulation that will be highly impactful in 2024 is the Digital Operational Resilience Act (DORA). DORA will create a compulsory risk management framework for the EU, placing greater pressure on banks to bolster resiliency and always-on availability.

This regulation is especially pertinent in light of major service outages experienced by banks worldwide. Under DORA, such outages would result in hefty fines. Likewise, consumers today expect 24/7 service, instant payments, easy access to online banking tools, etc., further highlighting the need for greater resilience and availability.

2024 will be an important year for neo-banks. Many neo-banks are already struggling amid the economic downturn, and adding more regulations could be the breaking point for some. Similarly, traditional banks will need to modernize in 2024, which will help them reduce costs, comply with regulations like DORA, and satisfy consumer demands for new services like instant payments. As a result, we expect to see more collaboration between banks to share functionality.

While GenAI won’t impact banking significantly in 2024, solutions like ChatGPT will push banks to rethink how they interact with their clients regarding optimal customer experience and convenience.

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