Forecasted developments in worldwide banking for the year 2024 and beyond into the medium-term.

Over the years, experts have made deliberate efforts to navigate the ever-changing landscape of the banking industry. These efforts aim to identify emerging trends, improve understanding and appreciation of these trends, and enhance competitiveness and growth while contributing to financial stability and economic development.

The need for a cogent analysis of emerging trends in the banking industry has become increasingly important due to recent challenges such as the COVID-19 pandemic, global recession, and natural disasters. These events have had a significant impact on the global economy and, in turn, on the banking industry.

It is impossible to discuss the activities of the banking industry without considering finance and economic policy. These factors have a practical effect on the operations and activities of banks. In January 2024, the writer published an article in the Business and Financial Times (B&FT) titled “Potential Finance and Economic Policy Considerations in 2024 and Medium-Term.” This article addressed macroeconomic factors that could shape the direction of global economies and impact banking operations, investments, and growth prospects.

Therefore, this write-up will focus on the trending activities within the global banking environment in 2024 and beyond. The insights from this discussion are expected to align with the commitments of banks towards responsible innovation and promoting excellent standards in the industry.

Income generation and cost management strategies will be significantly tested and influenced by the macroeconomic environment in which banks operate. The competitiveness of the banking industry will require institutions to use their ingenuity to retain customers. This will involve shoring up liquidity buffers to meet the demands of the market and customers.

One way for banks to achieve this is by offering higher deposit rates to existing and potential customers. However, this strategy may be challenging for banks operating in emerging economies, where economic growth prospects are high. There will also be persistent calls from investors, regulators, and other stakeholders for banks to ease credit impacts for companies transitioning to decarbonisation and investing in green activities. At the same time, credit standards for “brown” firms will be tightened. Higher interest rates will be a boon for most banks, ensuring a steady stream of income.

In conclusion, the banking industry will continue to face challenges and changes in the coming years. However, with a thorough understanding of emerging trends and a commitment to responsible innovation, banks can navigate these challenges and contribute to the growth and stability of the global economy.  

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