# Ten years down the line: predicting the future of FS Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-11-14 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: Unveiling the Future of Banking: Traditional vs. Challenger Meta Description: Discover how traditional banks are adapting to the rise of challenger banks, fintechs, and Gen Z preferences, to create a new standard in financial services. URL: https://financedigest.com/ten-years-down-the-line-predicting-the-future-of-fshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-938004376-1736814865100-compressed.jpg) _![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/534-1736814865079-compressed.jpg)_ _By **Monica Hovsepian,** Financial Services lead, OpenText_ Despite the static nature of the industry, for generations, many customers have been showing their traditional, family banks undue loyalty. Not only were the big players in the traditional banking scene offering much the same in terms of features and benefits, but the manual admin side of [switching banks](https://www.finance-monthly.com/2019/03/why-do-so-many-hesitate-to-switch-banks/#:~:text=37%25%20of%20respondents%20cite%20%E2%80%9Cexcessive,about%20alternative%20options%20to%20switch.) was simply too much of a headache for most. In the 2010s, however, everything changed. Over the last two decades, technology has been [evolving so rapidly that banks](https://www.financedigest.com/how-banks-will-evolve-to-support-small-business-owners.html "How banks will evolve to support small business owners") have witnessed the arrival of new high-tech competitors that are threatening their dominance. Challenger banks, big techs and  [fintechs are shaking up the traditional banking](https://www.financedigest.com/fintech-v-the-banks-uneasy-bedfellows-or-a-match-made-in-heaven.html "FinTech v the Banks: Uneasy Bedfellows or a Match Made in Heaven?") landscape and are driving change within the industry. They’re able to go further than traditional [banks to meet customers’ needs and decipher some of the complexities surrounding financial products and the industry](https://www.financedigest.com/how-open-banking-will-change-the-banking-industry-in-the-next-10-years.html "How Open Banking will change the banking industry in the next 10 years"). This has set a new [standard for what customers can expect from their bank](https://www.financedigest.com/first-abu-dhabi-bank-reiterates-not-eyeing-offer-for-standard-chartered.html "First Abu Dhabi Bank reiterates not eyeing offer for Standard Chartered") in terms of services. For many consumers, however, it would seem attitudes [towards digital banking](https://www.financedigest.com/the-journey-towards-a-digital-bank-five-major-stages-to-successful-banking-digitalisation.html "THE JOURNEY TOWARDS A DIGITAL BANK – FIVE MAJOR STAGES TO SUCCESSFUL BANKING DIGITALISATION") are not evolving as rapidly as the technology underpinning it. Studies have found that there is still significant distrust towards fintechs – with only [14% of people](https://thefinancialbrand.com/news/open-banking/new-data-people-dont-trust-open-banking-or-fintechs-but-use-both-127722/) trusting a fintech company to securely link with their primary bank account. Therefore, despite the narrative around fintechs, this would suggest that the game is still all to play for if traditional [banks can further transform their offering](https://www.financedigest.com/first-abu-dhabi-bank-could-renew-35-billion-offer-for-stanchart-bloomberg-news.html "First Abu Dhabi Bank could renew billion offer for StanChart -Bloomberg News") and services. We’ve seen astronomical change in the [banking sector over the last decade and we can expect to see this transformation](https://www.financedigest.com/post-crash-banking-regulation-is-transforming-the-world-of-corporate-lending-for-the-better.html "Post-crash banking regulation is transforming the world of corporate lending – for the better") continue. Though it’s impossible to say exactly where the financial services (FS) industry will be in the [next ten years](https://www.financedigest.com/1-in-10-workers-considering-a-career-change-in-the-next-year.html "1 in 10 workers considering a career change in the next year"), here are some the top priority areas for banks and where can expect to see the most change. **Gen Z has joined the chat** In the coming years, one of the great [challenges FS organisations will increasingly face](https://www.financedigest.com/global-economy-seen-facing-a-challenging-year-eurochambres.html "Global economy seen facing a challenging year -Eurochambres") is addressing the priorities of Gen Z – not only as they become consumers in their own right, but also as they enter the workforce. This generation has a completely different mindset to Millennials or Boomers, and it’s therefore essential to [consider their needs](https://www.financedigest.com/institutions-need-to-consider-spreadsheet-management-to-meet-the-pras-latest-stress-testingexpectations.html "Institutions Need to Consider Spreadsheet Management to Meet the PRA’s Latest Stress Testing Expectations"). When it comes to their finances, notably, [less than half of Gen Z](https://thefinancialbrand.com/news/gen-z-banking/top-gen-z-trends-impacting-banking-2022-127233/#:~:text=Less%20than%20half%20of%20Gen,seven%20out%20of%20ten%20Millennials.) admit to having an account with a traditional bank, credit union, neobank or fintech. In contrast, [8 out of 10 Gen Zers](https://intlbm.com/2022/04/04/62-of-gen-zs-dont-have-any-bank-account-at-all-thunes-survey/) use social media on multiple occasions throughout the day, while [more than two thirds](https://www.barrons.com/advisor/articles/gen-z-financial-advice-tik-tok-youtube-survey-51658428131) of Gen Z admitted to getting financial advice from Tik Tok or YouTube. To attract and retain Gen Zers, [banks will need to develop products that offer](https://www.financedigest.com/britain-urges-banks-to-offer-mortgage-flexibility-in-cost-of-living-crisis.html "Britain urges banks to offer mortgage flexibility in cost-of-living crisis") value, are authentic and educational – catering to Gen Z’s desire to learn innovatively – and are tailor-made for this audience. **Addressing the [Total Experience](https://www.financedigest.com/one-app-for-a-total-communications-experience.html "One App for a Total Communications Experience")** Another factor that is becoming of [increasing relevance is Total Experience](https://www.financedigest.com/fintechs-how-to-increase-loyalty-through-user-experience-and-fraud-prevention.html "FinTechs: How to increase loyalty through user experience and fraud prevention") – which Gartner is referring to as TX. We see this as the combined offering of the [Customer Experience](https://www.financedigest.com/curating-a-fully-contactless-customer-experience-for-payments.html "Curating A Fully Contactless Customer Experience for Payments ") (CX) and the Employee Experience (EX). The goal is to [improve the overall experience](https://www.financedigest.com/improving-customer-experience-through-broadening-your-mobile-offering.html "Improving customer experience through broadening your mobile offering"), breaking down siloes while integrating technology with employees, customers, and users. TX is the differentiating factor for businesses, able to give them a competitive edge. In today’s [digital age](https://www.financedigest.com/how-can-traditional-banks-deliver-game-changing-innovation-in-the-digital-age.html "How can traditional banks deliver game-changing innovation in the digital age?"), we’re using so many different channels in both our work and personal lives, and consumers are increasingly aware of the digital trail their data is leaving. This is [understandably leading to questions around how their data](https://www.financedigest.com/how-data-visualisation-is-helping-the-insurance-sector-understand-environmental-risks.html "How data visualisation is helping the insurance sector understand environmental risks") is going to be used. FS organisations [need to reassure their customers](https://www.financedigest.com/why-empathy-needs-to-sit-at-the-heart-of-bbls-and-cbils-customer-service.html "Why empathy needs to sit at the heart of BBLS and CBILS customer service"), whilst using this data to deliver smart and relevant engagements back to the user. The [banks which can do this most effectively](https://www.financedigest.com/banking-turmoil-will-not-have-knock-on-effect-on-commodities-trafigura-cfo.html "Banking turmoil will not have knock-on effect on commodities -Trafigura CFO") are going to see the most success. This will be achieved by implementing further, smart digital transformation customer journeys and the use of appropriate [Artificial Intelligence](https://www.financedigest.com/types-of-artificial-intelligence.html "Types of artificial intelligence") (AI) and Machine Learning (ML) capabilities to continue innovating. There’s no denying that the FS [industry isn’t going to change](https://www.financedigest.com/open-banking-the-real-step-change-for-the-global-payments-industry.html "Open banking: The real step change for the global payments industry") overnight. In the short term, however, we can expect to see banks pivoting to address common customer concerns, such as those around the rising interest rates and [cost-of-living crisis](https://www.financedigest.com/british-shoppers-defy-cost-of-living-crisis-at-christmas.html "British shoppers defy cost-of-living crisis at Christmas"). In general, we should anticipate [banks shifting to become more proactive and empathetic towards their customers](https://www.financedigest.com/christmas-debt-hangovers-how-banks-can-help-customers.html "CHRISTMAS DEBT HANGOVERS: HOW BANKS CAN HELP CUSTOMERS"), especially in the face of great financial and societal uncertainty. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---