Digital banking insights: themes for 2024

Increasing connectivity through APIs

Open Banking has revolutionised how individuals manage their personal finances. Online dashboards now allow consumers to see the balances in their accounts all in a single place, while apps can plug into the ensuing stream of data to produce everything from credit score predictions through to pension forecasts.

Application programming interfaces (APIs) sit at the heart of that digital transformation, allowing computer programmes to exchange data quickly and securely. Yet, while regulations ensured API progress was rapid in the consumer sphere, evolution has been slower in the institutional banking space. 

Although most retail accounts exist within the same banking market, institutional banking clients often operate over multiple jurisdictions, adding layers of complexity when it comes to sharing data. 

Developing APIs that will allow banks’ systems to interact automatically with a broader range of financial management platforms – from accounting software through to customer relationship management platforms or enterprise resource management programmes – is a key priority. The data needs to flow more easily from one programme to another to help streamline processes, keeps costs down and make operational margins more sustainable.

“Institutional banking is, by its nature, very complex,” says Michael Dowds, interim head of digital, innovation, and design at RBS International, “In some instances, we’re talking about 100 different cards and 100 different readers to log into 100 different accounts globally. 

If a company wants to get an overarching view – what’s my cashflow looking like, how am I positioned – for many, it can still be a manual process using Excel spreadsheets. We’re all human, so the more you have to use processes like that, the higher the risk of error or duplication.” 

This year is expected to mark a tipping point in the journey towards greater connectivity between systems. “We’re now getting inquiries every week from middleware and other technology providers asking for our API details,” says Melissa Maakestad, head of customer journeys at RBS International. 

The importance of mobile apps for institutional customers

Another key trend for 2024 will be more digital banking services becoming available on mobile apps, in addition to traditional web-based systems. Just as personal banking customers are used to hearing a “ping” from their mobile phone when a transaction is completed or they receive a payment, notifications will now become a bigger part of institutional customers’ lives too.

“Customers want to be able to do everything that they can do at their desks while they’re away from their desks,” says Melissa. “For example, customers want to access their inward payment tracker on their mobile banking app – once they see a payment has been received then they can instruct a member of their team to release the funds.”

Michael agrees: “Getting real-time notifications on your mobile device means you’re not chained to your desk. It means you’ll still be available to authorise payments, which are often time sensitive because of cut off times and foreign exchange rates.”

More widely the opportunity to deliver personalised updates and notifications regarding rate changes, products, and insights allows customers to be more proactive in how they manage relationships with their financial providers.

“But mobile apps will continue to be a companion to desktop systems, rather than a replacement for them,” Michael concludes.

Improving the customer journey 

Improving the user experience (UX) will be a major trend over the coming months, including the time it takes to open accounts which remains a persistent challenge across the industry given anti money laundering regulations and other requirements.  Clients want a more transparent process where they can track applications via online dashboards, in the same way they can track the delivery of an online order from Amazon.

Continuing to remove paper from processes where it’s no longer needed is also an ongoing theme, in particular the end of paper statements for customers that don’t need them.  There will also be increasing connectivity between customer and bank systems to automatically send updates of in life data.

“It’s about having a single source of truth,” explains Michael. “If the same director is a signatory for several accounts held by the same client, then they should only need to update that information once, not individually for each account. Again, that saves time and increases accuracy levels.”

Building a culture of innovation to keep pace

More broadly, the importance of building a culture of innovation within organisations, given the pace of digital transformation, was seen as paramount. Some organisations are experimenting with innovations like digital assets – cryptocurrencies and tokenised securities – but consensus was that many are waiting for regulatory clarity as a first step in developing more disruptive technology.  Organisations are also looking to their banks to harness artificial intelligence (AI) in areas such as fraud detection.

“It’s an exciting time, and the pace of change is fast. The key is getting the foundations right and then building from there” adds Melissa. 

If you want to discuss this further then please contact Michael Dowds, interim head of digital, innovation, and design at RBS International, or Melissa Maakestad, head of customer journeys at RBS International.

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