How Tech Trends Reshaped the US Banking Industry in 2024
As the year 2024 passed, American banks had a roller-coaster ride of caution and resilience. With moderation in inflation and stable employment, the economy managed to shun recessionary shocks and credit market turmoil that were expected earlier. Fighting against heavy macroeconomic headwinds was not on the agenda but instead, banks zeroed their attention on technological innovations that brought steady growth. Here's how these trends shaped banking technology spending in 2024, while laying the foundation for US banking trends in 2025:
1. Cost-Cutting and Operational Efficiency Revamped
Banks were rebalanced and reshuffled to meet economic strain. These strategies involved slashing budgets on technology and consulting and reducing new investment. Staffing was halted, while high-cost operations like internal business units were also brought to an end. It sought cost-cutting that envisioned the costs of doing operations but promoted flexible and long-term systems. One Point One Solutions supported this streamlining through customized solutions. In 2025, operational efficiency will continue to be a focus, but automation and AI will drive even deeper cost savings and process improvements, reducing manual intervention and streamlining workflows.
2. AI Finally Gains Popularity
2024 was a year of immense transformation as Artificial Intelligence, especially GenAI, became the new norm of the banking sector. Internal usage cases such as banker and agent tools scaled up, moving to customer applications like transforming the contact center. AI reduced workloads, enhanced customer interaction, and built experiences, while compliance became an area of focus to ensure adherence to regulatory requirements. Artificial intelligence in US banking will continue to evolve in 2025, focusing on more advanced AI capabilities such as autonomous banking assistants, improved fraud detection, and personalized financial guidance.
3. Payments Became Faster and More Data-Rich
The payments ecosystem became even more data-intensive, with the increasing consumer expectation for smooth transactions. ISO 20022 and other standards for structured data, real-time payments, and embedded banking entered the mainstream. Evolution was supported by advanced analytics, blockchain for cross-border payments, and AI-driven fraud prevention to make the payment process safe and efficient. As we approach 2025, fintech trends shaping US banking will focus on the acceleration of real-time payments and the integration of AI to predict and prevent fraud before it occurs, offering even faster, more secure transactions.
4. Fraud Identification Evolved
Fraud prevention was the need of the hour as the emergence of GenAI-powered threats made advanced tools a must-have. Behavioral biometrics, device intelligence, and AI-driven fraud analytics were key in detecting and preventing fraud in real-time, thus ensuring the security and trust of the customer. In 2025, AI-powered fraud detection systems will be even more sophisticated, integrating biometric data, machine learning, and real-time transaction monitoring to provide greater accuracy in identifying and preventing fraudulent activities.
5. Compliance Challenges Were Met
The regulatory changes for banks included the CFPB's Personal Financial Data Rights rule, updated Community Reinvestment Act requirements, and DFA 1071. These changes made banks rethink their fundamental platforms, expand datasets, and improve governance practices, especially regarding AI-driven processes. In 2025, US banking will face further regulatory scrutiny on AI usage, with a focus on ensuring compliance with evolving data privacy laws and ethical guidelines around AI in financial services.
6. Consumer Lending Transformed
The consumer lending legacy systems, typically a few decades old, underwent significant modernization. Institutions redesigned lending journeys using SaaS-based platforms and customer-centric interfaces, as interest rates stabilized and competition from challenger banks increased. Looking ahead to 2025, consumer lending will continue to be shaped by AI, allowing for hyper-personalized loan offerings, and fintech innovations that provide seamless digital lending experiences.
7. Treasury Management Was Revolutionized
Commercial clients insisted on more integrated and intuitive treasury solutions. Banks collaborated with fintechs to present cutting-edge API-driven platforms that streamlined accounts payable/receivable and provided actionable insights. These efforts redesigned treasury management revenue pools and enhanced client satisfaction. Fintech trends in treasury management will evolve in 2025, with an increasing reliance on AI-driven solutions to offer predictive analytics and real-time decision-making capabilities.
8. Data Transformation Advanced
Banks further extended the data transformation efforts from modernizing infrastructure to real-time analytics, data quality enhancements, and unified data lake architectures. These developments enabled the support of AI and GenAI use cases, allowing insights that were previously impossible to realize into better decision-making. In 2025, the US banking industry will further refine its data strategies, utilizing AI and machine learning to unlock deeper insights, improve predictive analytics, and enhance decision-making across various banking functions.
9. Continued Cloud Migration and Transformation
Hybrid cloud environments continued to gain ground, merging on-premises systems with cloud hyperscaler services. Industry-specific clouds became an important step forward, enabling core banking, lending, and decision management capabilities while optimizing cloud expenses. The migration to cloud platforms will accelerate in 2025, with more banks adopting industry-specific cloud solutions to drive agility, scalability, and innovation.
10. SMB Digitalization Hit New Heights
Small and medium businesses (SMBs) got access to digital-first banking solutions customized for their needs. Banks focused on enhancing customer experience for SMBs, offering innovative products, and supporting loan origination and business insights through seamless digital onboarding and analytics. One Point One Solutions partnered with banks to effectively address these needs. Looking forward, fintech trends in the US will continue to drive SMB digitalization, with a focus on enhancing access to digital loans, real-time payment solutions, and AI-powered business analytics tools.
11. Data-Driven Sustainability Initiatives Expanded
As ESG investing gained momentum, banks started focusing on climate-related risks and complying with evolving regulations. Automation-heavy data strategies enabled real-time sustainability reporting, which helped banks align with ESG goals and build trust among stakeholders. In 2025, data-driven sustainability in US banking will expand further, as AI and data analytics enable more sophisticated reporting on environmental and social governance (ESG) factors, pushing banks toward greater transparency and accountability in their sustainability efforts.
Despite the uncertainty of the macroeconomic environment, technology imperatives for banks in 2024 were well defined. Investments in data, cloud, and AI became critical to thrive in an API-based ecosystem of fintech partners and service providers. Institutions that integrated these partnerships into seamless, customer-centric offerings emerged as industry leaders. In 2025, these trends will evolve further, with AI, fintech innovation, and real-time payments driving a new wave of transformation in US banking. One Point One Solutions was proud to support this evolution by delivering tailored strategies that empowered banks to succeed in this dynamic landscape.
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