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SavvyMoney 2024 Predictions: Three tech trends for 2024

vmblog-predictions-2024 

Industry executives and experts share their predictions for 2024.  Read them in this 16th annual VMblog.com series exclusive.

Three tech trends for 2024

By David Dowhan, Chief Product Officer at SavvyMoney

As 2023 winds down and we gear up for the year ahead, financial institutions (FIs) face a choice: determine how to adapt to meet the ever-evolving expectations of customers or deal with the consequences of failure. The financial industry sits on the cusp of major disruption and innovation driven by emerging financial technologies, and the smartest FIs will forge partnerships with fintechs to stay relevant.

By blending fintechs' cutting-edge solutions and services with the established trust of a traditional FI, these partnering institutions are positioned for success. As we move into 2024, the pace of change is expected to accelerate as fintech transforms the delivery and consumption of financial services. Those FIs failing to adapt will be left behind. In light of this need to adjust, I've identified three tech trends shaping next year's financial landscape.

1.  Focusing on financial wellness

Financial institutions must make financial wellness a top priority for consumers in 2024. Banks and credit unions will need to accelerate their digital transformation efforts to deliver highly personalized financial guidance at scale by leveraging data and AI to provide tailored insights that can improve financial outcomes for customers.

Additionally, enhanced analytics capabilities will enable banks to identify consumers at risk of experiencing financial hardship. By proactively reaching out to these customers and connecting them with appropriate solutions, banks can reduce defaults and bankruptcies. Providing digital financial coaching, educating consumers on topics like credit health and debt management, and incentivizing positive financial behaviors can also strengthen financial wellness.

Ultimately, banks and credit unions focused on helping consumers take control of their financial lives will be able to build deeper and more trusting relationships. These customer connections improve satisfaction and build stronger loyalty over time. By demonstrating a genuine commitment to their customer's financial health, forward-thinking financial institutions will also benefit from higher lifetime value of each customer, lower customer acquisition costs and reduced operational risks. Financial wellness is a win-win.

2.  Leveraging AI for empowerment

Conversational AI is poised to transform how consumers engage with their finances. Sophisticated chatbots will provide 24/7 on-demand support, advice and recommendations tailored to each user's unique financial situation. By combining natural language processing with personalization algorithms, these AI agents can help build financial literacy and drive positive behavior change.

For example, a user could message their bank's chatbot to get help understanding their credit score. The AI would explain in simple terms what the score means, factors impacting it and steps to take to improve it. Importantly, the chatbot would adjust its responses and suggestions to fit the user's credit profile and broader financial context. Conversations will feel productive, personal and meaningful.

The accessibility and anonymity of AI-based systems will also give consumers a judgment-free space to discuss money matters. Allowing people to open up without embarrassment can empower them to get the guidance necessary for taking control of their finances. AI has the power to create a financially inclusive future for everyone.

3.  The power of partnerships for attracting the younger generation

Younger, mobile-first consumers are flocking to nimble fintech platforms. Legacy players must bridge the innovation gap to remain competitive, and appeal to and attract these valuable demographics. Investing in conversational AI, gamification and multimedia financial literacy tools can help engage next-gen users.

Because developing and deploying new technologies at scale requires substantial capital, partnerships offer an attractive option. Connecting with specialized fintechs allows traditional institutions to augment their capabilities. However, to fully reap the benefits, banks and credit unions  must seamlessly integrate fintech solutions into their platforms and processes.

2024 will see some FIs stubbornly clinging to the status quo and losing relevance. FIs opting to embrace digital experiences, personalized advice and financial wellness will position themselves for success, and partnering with fintechs can accelerate this transition.

2024 will be pivotal for FIs. By leveraging strategic fintech partnerships, AI-driven conversational platforms and customized financial wellness initiatives, FIs will be poised to future-proof their business, even during the unprecedented transformation happening in the financial sector.

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ABOUT THE AUTHOR

David Dowhan 

David Dowhan has been in the financial services industry for over 25 years, bringing expertise in marketing technology, including machine learning, modeling, and predictive analytics. In his current role, David oversees SavvyMoney's new product initiatives, business intelligence, and customer service.

Prior to SavvyMoney, David has held executive product roles at NextCard Inc., the predictive analytics company eBureau, and Adteractive, which specializes in online lead generation. David was also the founder and CEO of a digital marketing company, TruSignal, that was acquired by TransUnion, where he spent two and a half years as head of product for their marketing solutions division before joining SavvyMoney.

Published Wednesday, December 20, 2023 7:31 AM by David Marshall
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