- The banking industry is in a much healthier place now than it was after the financial crisis of 2008.
- As a result of the increasing complexity of the banking ecosystem, financial giants and disruptive startups are navigating challenges and opportunities daily.
- Do you work in the Banking industry? Get business insights on the latest tech innovations, market trends, and your competitors with data-driven research.
The banking industry is in a much healthier place now than it was after the financial crisis of 2008. Total global assets climbed to $154,211 in 2022, up 3.79 percent YoY from 148,583 in 2021, according to The Banker’s Top 1000 World Banks Ranking for 2022.
With so much money to manage, major banks such as JPMorgan Chase, Bank of America, Wells Fargo, and more are releasing new features to attract new customers and retain their existing ones. On top of that, startups and neobanks with disruptive banking technologies are breaking into the scene, and traditional financial institutions are either competing with them or merging with them to improve their customer experience.
So let’s dive into the banking industry, the challenges it faces, and the road ahead.
The most prevalent trend in the financial services industry today is the shift to digital, specifically mobile and online banking (more on each of those in a bit). In today’s era of unprecedented convenience and speed, consumers don’t want to have to trek to a physical bank branch to handle their transactions. This is especially true of Millennials and the older members of Gen Z, who have started to become the dominant players in the workforce (and the biggest earners).
This digital transformation caused increased competition from tech startups, as well as the consolidation of smaller banks and startups, contributing to a record-breaking 2021. However, global fintech funding has cooled this year as funding conditions have become more challenging across most of the world. In Q3 2022, overall fintech funding dropped 38% quarter-over-quarter (QoQ) to hit $12.9 Billion—comparable with Q4 2020 funding, according to CB Insights.
Looking ahead, startups and scale up firms alike must demonstrate profitability and growth potential to earn back the trust of investors.
Mobile Banking
To be frank, mobile banking is all but a requirement for consumers at this point. In Insider Intelligence’s Mobile Banking Competitive Edge Study in 2020, over 45% of respondents said they identify mobile as a top-three factor that determines their choice of FI, up from 38.0% in 2019—making it the second most important factor behind fees.
When broken down by generation, 91% of millennials use it, 95% of Gen Xers, and 60% of Baby Boomers. Critically for the banks themselves, 64% of mobile banking users said that they would research a bank’s mobile capabilities before opening an account, and 61% say they would change banks if their bank offered a poor mobile…
Read More: Overview, Trends & Analysis of Banking Sector
