Persisting economic turbulence, paper-thin margins and a battle for deposits have created a challenging first half of 2024 for financial institutions. However, there are also substantial opportunities for banks and credit unions to win back consumer and business trust and explore how to leverage powerful technology like artificial intelligence (AI). As we enter the second half of the year, we expect to see banks and credit unions invest in a more consistent customer experience to improve engagement and retention.

Here are some trends to watch:

Providing a holistic experience with multiple touchpoints

Banks and credit unions are making a deliberate attempt to embrace consumers and small businesses in a more comprehensive way. In the past, relationships were often viewed in silos—the digital customer experience looked different than the branch experience, which looked different from the contact center experience. Now, instead of focusing on channels, institutions are starting to strategically leverage data, a digital-first philosophy and greater connectivity to approach customer and member relationships from a more complete perspective.

Enabling financial fitness with trustworthy advice

Inflation and the cost of living remain high, leaving many struggling, especially lower- and middle-income consumers. Banks and credit unions are also having to overcome challenges associated with where their customers and members are receiving their financial advice, making it more difficult to offer meaningful help. Younger generations are generally not coming to the branch; instead, they’re looking to unverified influencers on TikTok or other social media sources.

While the old playbook resembled more of a generic checklist, successful banks and credit unions are taking on a more informed approach powered by real-time data, providing individuals with resources, tools and education within the context of their unique journey. Incorporating resources aligned with their financial situations helps consumers better understand and apply the information, making it more impactful. More institutions will also leverage open APIs to innovate more quickly and offer a broader range of financial tools. As banks and credit unions continue to advance this charge, consumer trust that had eroded in previous years will continue to come back and strengthen, and they’ll remember who’s there for them during volatile economic times.

Leveraging data as the great enabler

The ability to take on this holistic approach and personalize financial wellness support all depends on the strength and quality of an institution’s data. Investing in the technology and tools to enable stronger data integration across all channels—digital, the branch, the contact center, etc.—is the only way to really understand who a customer or member is and how to support the full range of their needs. Being able to demonstrate relevant personal insights and tools shows consumers that an institution is committed to their success and drives connection and engagement.

Developing an AI strategy

Institutions are increasingly evaluating AI use cases, attempting to separate the hype from the substance. More are looking at crafting and deploying a formal AI policy, helping to educate and inform employees about how to appropriately and safely use the technology. The emphasis continues to be focused on developing a thoughtful and comprehensive strategy rather than immediate implementation. This strategy must be centered around data, tailored to each institution and aligned with consumer needs. Those that ignore AI will get left behind.

Focusing on small businesses

As small businesses navigate economic impacts, more institutions are determining where and how they can step in to support them. Better cash flow management tools, education and guidance around new digital payment options and more sophisticated budgeting assistance are all areas of opportunity. Banks and credit unions that support this segment effectively will also be well positioned to increase deposits.

Looking to the future: success in 2024 and beyond

“The financial services landscape contains several notable challenges, but I am encouraged and proud to see financial institutions step up with digital-first strategies, a commitment to channel connectivity and a hyper-focus on personalized financial wellness support. Such efforts are truly making a difference in the well-being of consumers and businesses across the country,” said Brendan Tansill, EVP and president of digital banking for NCR Voyix. “As we look to the next six months, we expect more institutions to leverage the power of real-time data, rely on trusted partners to help with advances in AI and double down on efforts to personalize the holistic customer experience.”