Retail banking in 2024: What to expect

2024 will be another major year of change and challenge for retail banks. Our hope is that we see some retail banks take a more ambitious approach to digital self-service banking and not simply mark the year by more branch and ATM network cuts that harm customers.

Will the brakes be applied on retail bank branches and ATM cuts?

In many markets like the U.K. regulatory pressure to slow, if not stop, branch closure programs have increased, according to a report by Reuters. One hope for communities affected by the loss of their last bank branch or free to use ATM has been and continues to be shared hub concept.

But this approach has proved to be slow to set up. 2024 must see an acceleration in these schemes or a rethink. There must be a harnessing of in-branch digital technologies to make sure these hubs are much more than just pop-up shops to get vulnerable or undecided customers to sign up for online banking. In short, a shared banking hub 2.0 might become a reality in 2024.

Expect to see a new digital hub at the heart of the retail bank

2024 should see ambitious steps taken by some banks to embrace a new generation of digital self-service hubs to offer improved access to services and achieve operational savings and keep branches open. This is about merging advanced self-service terminals with human assistance, backed by remote banking capabilities through video links to central pools of specialist advisers on loans, mortgages and other products and services.

This hybrid model could define future retail bank branches, providing customers the autonomy of self-service with the reassurance of expert guidance, in a secure space. What is more this approach will not only streamline operations in 2024, but also uncover new revenue streams as branches evolve into multifunctional spaces.

AI is coming!

Generative AI grabbed the headlines in 2023. While this technology will become more influential in 2024, other forms of AI linked to automating processes and machine learning will continue to make significant waves in how digital self-service solutions offer better customer experiences and operational efficiencies. This will be both within customer interfaces like integrated chatbots within ATMs and ASSTs as well as in powering predictive analytics on cash management and ATM maintenance.

Keep vigilant on ATM security

There was something of a mini-crime wave against ATMs in 2023. This saw not only a resurgence in physical, but also cyber-attacks on ATMs. This included two new reports of jackpotting frauds.

To protect customers, 2024 must see a broader adoption of sophisticated cybersecurity strategies, such as Zero Trust and micro-segmentation. As retail banks and ATM operators seek to invest in new self-service channels, their investment must always be matched by an investment in resources and processes to embed modern cybersecurity into the self-service banking infrastructure to stop cyber-attacks and fraud.

Let's collaborate to thrive

Those macro trends like changing customer behavior and the impact of inflation on spending are not lessening in 2024. This is the kind of unrelenting pressure that is going to push banks and other institutions into more cooperative relationships that jointly maintain quality services while reducing operational costs. Examples that we might see in 2024 range from more banks pooling ATMs on a national scale like in Belgium, branch sharing or partnerships between neo banks and legacy banks.

In 2024, banks and ATM operators must confront change positively. Thankfully, most are seeking to strike the right balance between superior customer experience across all channels while achieving much greater operational efficiencies, security, and agility.

So, let's be optimistic about how 2024 could be a momentous year for everyone.