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2024 – what’s on the horizon for payments and data-driven financial services?

As we step into 2024, the financial services landscape is poised for significant transformations. Here are the key trends that are anticipated to shape the industry in the coming year identified by our member tink:

Pay by Bank and VRP Revolution:

  • Pay by Bank: This innovative payment method is expected to gain widespread adoption in 2024, offering consumers more choices and businesses the ability to accept instant, account-to-account payments globally.
  • Variable Recurring Payments (VRPs): Anticipated to reach its full potential, VRPs provide consumers better visibility and flexibility in managing recurring payments, enhancing financial control and avoiding overdraft fees.

Data-Driven Risk Assessments in Lending:

  • Lenders are increasingly prioritizing investments in data-driven risk assessment models for affordability checks. By leveraging transaction data from consumers’ bank accounts, lenders can make informed credit decisions, widen access to credit, and protect vulnerable borrowers from financial distress.

Sustainability Tools Take Center Stage:

  • Consumers’ demand for tracking environmental impact through banking services is expected to rise in 2024. While 40% of UK consumers express interest, only 24% of banks currently offer such tools. Banks are gearing up to bridge this gap, with 40% reporting active development of carbon tracking services.

Financial Management Support Upsurge:

  • Banks are set to intensify data-driven financial management support to assist consumers grappling with high costs. With 27% feeling their bank is aiding them through the cost-of-living crisis, there’s room for improvement. Forward-thinking banks offering such services report commercial benefits (50%) and enhanced customer experience (50%).

Collaborative Development in Commercial VRPs:

  • The collaborative effort within the financial services industry is expected to drive the growth of commercial VRPs. These solutions aim to enhance financial transparency and control, allowing users to manage subscriptions seamlessly through their bank apps, addressing financial health concerns.

Investments in Affordability Checks:

  • Affordability checks will continue to be a top priority for UK lenders in 2024. As 58% report increased rejections due to affordability criteria, investments in data-driven lending models become crucial to widen credit access while protecting struggling borrowers.

Rise of Data-Driven Financial Services:

  • Banks will increasingly offer data-driven financial services, with 42% of banking executives recognizing their responsibility to help customers through the cost-of-living crisis. The commercial benefits of these services are evident, with 50% of banks reporting positive outcomes.

In conclusion, 2024 is poised to witness the mainstream adoption of data-driven financial services, revolutionizing payment methods, enhancing sustainability efforts, and providing robust financial management support to consumers and businesses alike. The industry’s collaborative efforts and investments in innovative solutions are set to reshape the financial landscape in the coming year.

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