Potential trends in global banking in 2024 and medium-term


Over the years, deliberate efforts have been made by experts to navigate the waves of transformation in the banking industry to facilitate the identification of emerging trends; improve understanding and appreciation of these trends to advance service delivery and corporate performance; and enhance competitiveness and accelerated growth of the banking industry; while contributing meaningfully to financial stability, development and growth of economies across the globe.

Cogent analysis of emerging trends in the banking industry is necessitated by prior and recent challenges including the outbreak of COVID-19, which was preceded by global recession; Russia-Ukraine war and the cyclical effects on global economies; natural disasters such as hurricanes, tornadoes and heavy floods, to name a few.

Meaningful discussions on banking industry activities cannot proceed without recourse to finance and economic policy considerations; these have practical effects on the bearing and line of activities within the banking industry. However, earlier publication in January 2024 by the writer titled, ‘Potential Finance and Economic Policy Considerations in 2024 and Medium-Term’ (in the Business and Financial Times (B&FT)) addressed the macroeconomic factors or concerns that could define and shape the direction of global economies; and impact on banking operations, investments and growth prospects.

In view of the foregoing, discussion in this write up is focused essentially on trending activities within the global banking environment in 2024 and beyond. Insights from the discussion are expected to resonate immensely with commitments of various banks towards driving ‘responsible’ innovation; and towards promoting excellent standards in the global banking environment.

Income Generation and Cost Management Strategies

Banks’ income generation capabilities and cost management strategies would be significantly tested and influenced by the respective macroeconomic environments in which they operate. Competitiveness of the banking environment would compel institutions in the industry to draw on their ingenuity to retain customers. This would require shoring up banks’ liquidity buffers to effectively meet markets or customers’ demand.

One of the identified ways in which banks could achieve the foregoing objective is by offering higher deposit rates to existing customers and prospects. Nonetheless, it is worth-stressing, implementation of this strategy may be facile for banks operating in emerging economies where stronger economic growth prospects are quite high.

Persistent calls on managements of financial institutions by investors, regulators and other stakeholders would reaffirm banks’ commitments to easing credit impacts for companies transitioning to decarbonisation and those investing in green activities; while tightening credit standards for ‘brown’ firms. Higher interest rates would be a boon to most institutions in the banking industry; it would ensure significant increase in net interest income for banks in many economies across the globe. However, net interest income generation would be stronger among banks in the Asia-Pacific Region than anywhere else.

In essence, banks operating in the Asia-Pacific Region are likely to outpace their global counterparts in net interest income generation in 2024; and in the medium-term. The dynamics, however, may not be too distinct from those envisaged to be experienced by banks operating in many developing economies. The caveat would remain due diligence on the part of the financial institutions; the onus would rest on banks to diligently reassess actual deposit costs; and how available deposit funds could be deployed efficiently and economically or cost-effectively.

These higher net interest income generation prospects notwithstanding, higher borrowing costs and other macroeconomic factors are likely to stymy expected growth in loan demands; the global economy is likely to witness modest growth in demand for loans (owing to the preceding conditions). Further, consumers’ desire for investments in real estate and other assets, including automobiles would surge; and this would affect their propensity to save.

However, the depletion in consumer savings would be offset with surge in demand for debit and credit cards for transaction purposes. In economies where this strategy would be well-rehearsed and effectively implemented, consumer spending would remain robust; economic stimulation and cyclical effect would be assured with greater level of certainty. Stress tests conducted by some central banks including the Bank of Ghana, Bank of England, European Central Bank and Federal Reserve in recent years (2020 through 2023) would be replicated in 2024 to measure; and assess the extent to which banks are building reserves to restore reduced balances to pre-pandemic levels.

Further, central banks would closely monitor banking industry trends; and review existing capital reserve requirement ratios in tandem with prevailing macroeconomic conditions. The foregoing notwithstanding, most large banks around the world would continue to maintain strong capital buffers and adequate liquidity to withstand both internal and external economic shocks; or moderate severe downturns capable of causing significant disruptions within their economies.  Moreover, banks would focus on the efficiency ratio as their competitive differentiator.

Margins are likely to be squeezed as deposit rates are elevated to cause surge in funding costs. Nonetheless, cautious efforts would be made by banks to control operational expenses and interest costs; while net interest income is increased considerably to offset costs; and drive net profits. Banks would not relent in their pursuit of rigorous reduction in non-performing loans’ (NPLs’) rates through effective application of restrictive lending policies across various product categories.

This would effectively mitigate any unforeseen and foreseen deterioration in credit quality due to customers’ challenges to outstanding loan payments. Further, the restrictive lending policies would cushion banks against potential adverse effects of inflation and monetary tightening on day-to-day operations; and moderate the impact on medium- and long-term investment options for businesses and other categories of customers, including individual customers.

The credit quality and collateral values of customers, both corporates and individuals, would largely influence the volume and value of loan approvals by banks. Non-interest income may be prioritised by banks to complement net interest income. This would imply upward review of consumer-centred fees such as fees charged for non-sufficient funds and overdraft fees. However, these fees may not be applied by banks without prior regulatory scrutiny and approval. Possible regulatory restrictions on the application of the above-mentioned fees imply banks would require strong cost discipline and more diversified revenue streams to assure boost in profitability and market valuation.

Proliferation of Emerging Technologies

One of the greatest challenges to the proliferation of emerging technologies is the attendant heightened risk; banks and their customers would have to contend with myriad fraud-related cases. To stem the tide, banks are expected to invest more in security-related technologies to assure customers of their safeguard from fraud. This would help to streamline banking operations; minimise risk; and solidify customers’ and public trust in the banking and broader financial system. Banks’ efficiency in the protection of customers’ data would require development of new methods for issuing and authenticating digital identity.

Further, banks’ investment in advanced modelling tools would remain inevitable if the underlying objective is to advance parse through transaction data; and ensure delivery of predictive insights at multiple customer touchpoints. Banks would also be interested in tapping into emerging artificial intelligence (AI) capabilities, so customers are provided with improved and competitive targeted advisory services.

This is imminent as the adoption of more digital wallets is encouraged; and more deepfakes emerge, with the latter having the semblance of fabricated or real humans. The choice and use of verification systems would vary from one bank to the other; and this could be attributed to multiple factors such as differences in sizes, number of operating branches and institutional networks, amongst others.

Overall, banks would be interested in deploying process technology to improve the efficiency and quality of services to be rendered to their existing clients and prospects. Generally, stability of the banking industry is assured when consumer confidence and trust level is high. Therefore, it is instructive for banks to leverage existing and emerging technologies to boost the confidence and trust of their customers.


Banks with higher capital requirements are likely to experience expansive changes; they would require massive investments in validation infrastructure, data, compliance, risk management and controls, among others. it is worth-noting, higher reserve requirements would weaken banks’ effective participation in capital markets; impact adversely on their trading activities; and reduce banks’ appetite for lending. These developments would have negative implications for effective economic stimulation and accelerated growth of the banking industry; and potentially stymy growth in the financial sector and broader economy.

China – US Dominance of Global Banking and Future Direction

Recent global rankings revealed the global banking industry is dominated by Chinese and American banks; many banks from these two leading global economies are listed in the top 100 banks in the world. However, what is more refreshing is the possible shift in paradigm of size and scope of global banking over the next decade; Asia and the Middle East are tipped to dominate global banking in terms of size as determined or measured by the value of assets. Reiteratively, more banks from the Middle East and India are envisaged to romp-up their operations to join the ranks of the top 100 global banks in the next decade.

Current prospects for external market penetration by Indian banks remain low. However, the prospects for India as an emerging economy would be leveraged by banks to increase the size and value of their balance sheets as the economy charts the path of steady growth; and government takes the necessary steps to investment massively in domestic infrastructure. Some analysts believed global money flows would be strongly influenced by sovereign wealth funds from the Middle East in 2024; and within the medium-term.

In countries such as Australia, Brazil, Saudi Arabia, United Kingdom (UK), Mexico; and other countries in Europe, central banks and regulators may continue to review and reduce barriers to data sharing. The uniqueness of this regulatory strategy lies in its ability to promote open banking initiatives that would give customers more control over their personal and other finances. This strong and positive wind of open banking is envisaged to blow soon in the United States.

The open desire of customers to have their needs met by non-financial institutions is on the ascendency in recent years. The inference is, banks would be impelled to intensely pit against traditional and new rivals. Further, the banking industry would witness significant shift in competitive dynamics; while the pace and intensity with which rivals would exert challenge on banks may be unprecedented. The banking industry would have the arduous task of contending with varied fundamental and disruptive forces that would strategically challenge business models for incumbent institutions. In many jurisdictions, the popularity of buy now, pay later (BNPL) would soar; it would be widely accepted as mainstream offering; and alternative to financing credit card transactions.

Customer Retention Strategies

Retention of existing customers and attraction of prospects could be assured through fostering strategic partnerships with franchised brands. To illustrate, a bank could work closely with third-party institution or institutions to organise Music Concert or Festival; with the bank playing integral role in presale tickets for the Concert or Festival. The proactive measures of some banks operating in Ghana to enter partnership with some transport companies to ensure and facilitate provision of (transport) fare discounts for users of their debit card or credit card for payments are equally strategic; and in the right direction.

Throughout the world, customers’ choice of primary financial services provider is gradually being shaped and determined by the provision of these non-traditional and non-banking perks. Nonetheless, it behoves each bank to carefully select its preferred third-party institution or institutions; and diligently assess the cost-benefits of such venture to minimise potential risk of losses.

Further, banks are expected to effectively serve their corporate customers; and remain innovative in their interactions and relations with all categories of customers. Thus, banks would have to scale-up to meet the funding needs of growing businesses in specific industries and sectors; carefully analyse exiting transactions; remain empathetic to businesses with challenges that may be exiting; and innovatively relate to different client groups, that is, from rural to sophisticated client groups; and craftily tailor banking products and services to ably satisfy the diverse needs of their clients.

Growing Preference for Omnichannel Banking Services

In their bid to improve customer experience, increase retention rate and attract more prospects, banks have over the years provided many seamless channels to enhance customer experience; and improve smooth and uninterrupted service delivery. These channels include, but not limited to in-branch services; access to banks’ websites; mobile applications (apps); use of emails and messaging apps; live chats with virtual assistants; and telephone interactions with banks’ representatives, among others.

These multichannel banking services provide customers with separate options; customers are able to transact and communicate with different units or departments of the same bank. Further, these channels allow banks to provide varied digital and touchpoint services to their customers; and proved useful to banks’ ability to secure strong relationships with customers in prior years.


However, multichannel banking impels customers to repeat their information each time they interact with different unit of the bank; this is because the system is not integrated to allow for seamless flow of information across different networks within the same bank. In some cases, customers become frustrated if they are compelled to share the same information each time they contact separate units of the same bank.

Today, customers’ craving for seamless and personalised services is growing; and this craving is rapidly calling for banks’ transitioning from multichannel services to omnichannel services delivery for banking customers. Though this important desideratum (omnichannel banking) remains a challenge to many institutions within the banking industry, its role in the contemporary banking landscape cannot be overemphasised.

Omnichannel banking ensures the delivery of integrated experience across all software platforms and channels, from interactions within the bank-branch through email support and messaging, thereby providing unified client experience. Extensive application of omnichannel banking would ensure the provision of top-notch personalised service for customers; collection of valuable data; surge in sales and loyalty; delight and retention of customers; resolution of queries at an accelerated pace; and costs reduction, among others.

The required technology for omnichannel banking may be capital intensive. However, the cost-benefit analysis swings the pendulum in favour of banks’ investments in technology that would ensure the delivery of seamless and personalised services to secure lasting relationships with their clients; while attracting prospects and assuring sustained operations.

Relations with Fintech and Bigtech Companies

Recent study conducted by Capgemini (as cited in Sinch.com, 2023) revealed nearly 75% of clients in the banking industry are attracted to competitors in the Fintech services industry because their products and experiences are tailored to meet clients’ expectations. The sampled clients (75%) believed products and services offered by Fintechs are characteristically cost-effective, fast and convenient. The findings lent credence to the statement that today’s banking customers demand convenience and more flexibility when it comes to services delivery.


Banks are expected to consolidate their existing relations with Fintech and Bigtech companies to reduce rivalry; improve collaboration and increase industry convergence. Customers would be more vocal about their evolving expectations; they would be interested in seeing their banks balance their digital-first experiences without any scintilla of compromise on the personal touch (experience).

The need for access to accounts information through smartphones would be commonplace among customers. Therefore, banks would be required to improve their technology and social media presence to meet customers’ growing demands; while leveraging their (customers’) presence on multiple platforms through their smartphones. The competitive business environment would make it imperative for banks to consider consistent investments in technologies that would create embedded finance opportunities for their numerous existing clients and prospects.

Efforts to establish presence in the marketplace and ecosystems could aptly be described as promising avenues to ensure diverse needs of clients are met beyond immediate business models for banks. It is believed banks’ application of strict standards towards the utilisation of third-party services would ensure chosen operating software platforms are tailored to needs of clients.

Generally, banks and other financial institutions are expected to positively navigate the ever-changing contours of the global economy to record stronger performance in 2024 and beyond. However, realisation of the foregoing would be contingent on outlined and implemented policies; and predicated on the extent of stimulation of economic activities in each country. Banks are envisaged to leverage these insights to engender positive change; and ensure customers receive the best possible service and experience within the banking industry.

Growth Prospects for Emerging Economies

Potentially, emerging economies characterised by younger population demographics, steady improvements in trade balances and strong consumer demand are likely to experience higher economic growth in 2024; and the medium-term. The enumerated features are likely to create ready and constant markets; engender trading and other activities that would ensure realisation of desired economic growth targets.

Though emerging economies such as India are projected to record growth rate of 6.3% in 2024, the narrative for advanced economies remains the reverse; during the current financial year (that is, 2024), some of the world’s leading economies including the United States, Japan, Canada, United Kingdom and Euro Area are expected to experience tepid growth at 1.4%; while year-on-year (YoY) growth of the global economy in 2024 is pegged at 3%. Some analysts remain sceptic of China’s actual growth potential in 2024 since the economy is impelled to contend with distressed property markets and weak consumer demands.

Expectations from Regulatory Bodies

Regulators are expected to tweak some of their existing and novel policies and directives to respond more nimbly to macroeconomic pressures that could potentially cause disruptions in their respective countries; affect relative stability of their banking industries and financial sectors; and impact adversely on resilience and sustainable growth of their respective economies.


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