Trends in Mobile Banking: Navigating Transformations and Innovations

When it comes to trends in mobile banking, we can say without a doubt that last year was dominated by AI.  It provided technological advancements to banking apps and other digital solutions dedicated to money. What we can expect in the upcoming months? That’s what we want to discuss in this article.

Let’s find out which trends will stand out this year and how they will shape the sector. We will focus on tech transformations, customer experience improvements, and other pivotal ideas that might significantly change the mobile banking landscape we know today. Will banks and financial institutions go through another revolution this year? Here are our findings.

The Importance of Mobile Banking in Financial Sector Transformation

Mobile applications proved to be the catalyst of change in various industries. Statistics show we’re using apps more each year. Revenue from this type of software is expected to reach $673 billion by 2027. Users usually have around 40 apps installed on their smartphones and access 10 of them daily. Interest in financial apps also steadily grows, which indicates that money-related software is also a big part of this sector.

Beyond its role as a convenience in money management, mobile banking shifted the way individuals and businesses approach financial services. They made many operations, previously available to Wall Street, accessible to the masses. More people gained a chance to invest, apply for a loan, or buy financial instruments from the comfort of their own mobile devices. By eliminating geographical constraints, time limitations, and enormous fees, money apps democratized finances and gave power to citizens who wanted to improve their financial literacy.

As for banks and other institutions, apps gave them unprecedented opportunities to increase customer engagement, as well as create new ways to market and sell their services. Targeted communication, personalization, and automation allowed financial institutions to provide tailor-made products, unique offers, and support for their customers. This not only enhances customer satisfaction but also corresponds with brand loyalty and long-term relationships with consumers. Banks can now anticipate the needs of their clients, react to emerging market trends, and deliver solutions in real time.

Summary of Mobile Banking Trends in 2023

It’s essential to observe the trends that have the biggest impact on the banking industry. Thanks to that, we can determine which technologies or market changes influence consumer requirements and the decision-making processes. Let’s recap what was crucial in 2023 for the financial niche.

Artificial Intelligence

AI was a crucial game-changer in 2023 that pivoted numerous industries towards advanced data analysis, automation, and personalization. Thanks to generative algorithms and advanced solutions that became broadly available, the digitization of banks sped up. The products became more sophisticated, adjusted to needs, and customizable. The addition of AI-powered chatbots and voice bots elevated customer service. It also improved fraud detection and risk assessment.

Research shows that 85% of financial institutions plan to adopt AI to achieve their business goals. Their biggest concerns include security breaches, system malfunctions, legal compliance, and labor displacement. Despite these potential challenges, the majority knows that using AI is imperative to gain a competitive edge and make their services attractive to their target audiences.

Value-Added Services (VAS)

When a banking app offers more than money management, transfers, and loans, it means its business model includes VAS. Value-added services are a chance for financial operators to offer additional features for their clients. This way, they can distinguish themselves in the crowded market but also make their services more useful. According to Deloitte’s report “Digital Banking Maturity 2023”, the main categories of VAS that were introduced by banks last year are:

• Commercial services – loyalty programs, discounts, promo codes, vending machine payments,
• Auxiliary services – password management, credit scoring, cloud storage, concierge,
• Mobility – parking tickets, transport tickets, highway access payments, hotel bookings, flight and train tickets,
• Public services – company registration, social benefits applications, healthcare package purchases, tax form submission,
• Entertainment – cinema and theater tickets, video-on-demand access payments, book and e-book orders.

When banks become multifeatured platforms (Banking App as a Platform, BAAP), customer engagement and loyalty are boosted, leading to better acquisition and retention. Thanks to the convenience they provide, they can gain access to additional customer data, which allows them to personalize services even more.

Security

Data safety and overall system security were factors strongly taken into consideration by banks and financial organizations. We live in an era where cyber threats, data theft, and other harmful activities are performed daily, especially when it comes to money. Hackers come up with more successful methods to break security measures and their actions result not only in financial consequences but also in reputation destruction. Safeguarding customer data should be the highest priority for all companies that handle finances.

According to several sources, the number of cyberattacks on financial institutions was at an all-time high in 2023. This underlines the importance of advanced security efforts even more. Banks should not only develop and deploy safety features but also educate their customers. A simple logging method based on two-factor authentication can be more than enough to prevent many risks. Other than that, banks should incorporate sophisticated encryption, perform regular security audits, and stay compliant with regulations to ensure the highest level of protection.

Mobile Banking Trends Forecast for 2024

Now it’s time to take a closer look at the predictions for the upcoming months. What can we expect in the banking applications realm?

Legal regulations

The financial sector has to face numerous challenges, including global crises, inflation, skyrocketing interest rates, data management, integration of AI, and cyber threats. New laws and regulations are made to help banks and institutions introduce best practices, create guidelines, adopt technological solutions, and prevent potential difficulties. Being compliant with legal rules means such companies can ensure trust by being proactive and reacting fast to problems.

In Europe, the Digital Services Act seems to be the most influential document that came into force on February 17th, 2024. It implies several important rules not only on mobile banking apps but on all online platforms. The US government is also preparing several acts that will regulate how digital banks operate. Overall, we can expect new laws that will be directed at mobile banking and the digital finance sector in general.

Polish market growth

Banking apps and the online payments segment in Poland are growing exponentially. According to Statista, Poland is one of the most developed European countries in terms of cashless payments. BLIK, a Polish Payment Standard that revolutionized the way people shop online and pay for services, will expand to Romania and Slovakia in 2024, proving that Poland is a trendsetter in digital payments.

Since 2018, the number of fintech companies located in Poland has grown by 79%, making the country a European hub for such brands. Polish market does not only provide reliable payment methods, and modern banking apps, but also software services dedicated to money-related businesses. In 2024, it’s expected that the Polish fintech scene will grow by creating long-lasting partnerships with foreign providers and building new, local startups.

New players

There are several ways new financial apps will hit the market. First, there are super apps – platforms with a plethora of features dedicated to various activities. Although now mostly popular in Asia, it’s predicted that super apps will also be introduced to the Western part of the world, disrupting the financial services we know today. The first sign of this trend entering Europe and the United States is mobile wallets like Google Pay, Apple Pay, and Samsung Pay implementing ticket sales and loyalty programs.

It’s also said that contactless payments will be on the rise, with cryptocurrencies becoming a significant player within this sector. In-app purchases and mobile Point-of-Sale (mPoS) solutions are the next two trends that showcase the enormous potential for new businesses to shine by delivering robust, user-centered apps dedicated to digital finances.

Internet of Things

IoT banking or Banking of Things is another trend worth watching. Wearables like smartwatches are a particularly interesting aspect of this niche, especially in the post-pandemic reality when contactless payments are as important as the convenience of using digital wallets without taking the smartphone out of the pocket. Such smart devices can also be useful in data analytics – not only for financial institutions but also for their customers who want to control their budgets.

According to research, the IoT banking market might reach $678 billion by 2028 with a CAGR of over 30%. The report showcases how many areas will be developed over the next few years: from wearable devices to blockchain technologies, we can expect banks, insurance companies, and other financial organizations to adopt powerful, secure IoT solutions to enhance customer experience and optimize operations.

Challenges and Opportunities of Mobile Banking

As you can see from the above-mentioned trends, the mobile banking industry is constantly growing. There are numerous ways to build a prosperous financial brand and thanks to technological advancements, startups, and enterprises can offer truly competitive, well-designed solutions. However, this sector is not free of obstacles to keep in mind. Due to the sensitive nature of money and the requirements associated with products dedicated to it (personal data management, theft prevention), ambitious organizations have to approach app development with awareness and caution.

In 2024, they have to be prepared for the ongoing release of new regulations, offer unprecedented security measures, and bet on seamless integration of AI. Thanks to that, they will be able to redefine customer experiences, drive operational improvements, and unlock new revenue streams. Embracing the tendencies we’ve discussed in this article is a strategic move for all banks and finance-related businesses. If they’re able to harness the power of new tech and stay compliant with legalities, they will win new customers, strengthen the loyalty of the current ones, and achieve sustainable growth in the upcoming years.

Are you ready for the upcoming trends? Is your company open to adopting new technologies? Thanks to our services, it can be. We will take care of your software needs and prepare solutions that offer extraordinary results while being compliant with legal requirements. Contact us to discuss potential collaboration.