# What the Future Holds For Financial Institutions in 2023
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-12-06
Category: BANKING
Category URL: https://financedigest.com/category/banking
Meta Title: Top Financial Institutions Trends for 2023
Meta Description: Discover the latest predictions for the future of financial institutions, including the rise of Neobanks and the increasing importance of embedded financial
URL: https://financedigest.com/what-the-future-holds-for-financial-institutions-in-2023html

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_![Hal Ramakers](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/635-1736814757043-compressed.jpg)_

As 2022 comes to a close, it’s time to reflect on the payments trends we’ve seen erupt this year and discuss what may be coming in the new year. We spoke with Hal Ramakers, SVP of Brightwell to learn more.

**What do you think we can expect to change in the near future for financial institutions (FIs)?**

Soon, I believe that enterprise brick-and-mortar [banks will likely continue to dominate the more prominent global](https://www.financedigest.com/world-bank-warns-global-economy-could-easily-tip-into-recession-in-2023.html "World Bank warns global economy could easily tip into recession in 2023") business/government channels. I also believe that there will still be a push towards [digital banking options and partner/buy disruptive technologies services](https://www.financedigest.com/matching-digital-adoption-with-cybersecurity-in-the-financial-services-industry.html "Matching digital adoption with cybersecurity in the financial services industry") to compete in the SME/Consumer space. They will likely need to [expand their partnerships and work to build faster](https://www.financedigest.com/forescout-and-fireeye-expand-partnership-enabling-faster-response-to-cybersecurity-threats.html "FORESCOUT AND FIREEYE EXPAND PARTNERSHIP, ENABLING FASTER RESPONSE TO CYBERSECURITY THREATS") payment rails to control more of the real-time payments space – domestically and globally.

As far as [community banks](https://www.financedigest.com/communicating-with-the-customer-is-the-future-of-mobile-banking.html "Communicating with the customer is the future of mobile banking") and credit unions, they will likely continue to consolidate as they try to maintain relevance with their “local” user bases. As they look for alternative ways to “reinvent themselves”, they are also looking for better technical solutions to replace the existing core platforms that are [holding them back](https://www.financedigest.com/are-legacy-it-systems-holding-the-construction-industry-back.html "Are legacy IT systems holding the construction industry back?"). This is a huge [challenge and not an easy task but will be critical](https://www.financedigest.com/mission-critical-sector-challenges.html "MISSION CRITICAL SECTOR CHALLENGES") to their survival since new disruptive core platforms and front-end technologies are emerging every day. They will need to partner with other FI’s or regulated entities, such as Brightwell, to bring additional [services that they aren’t able to support from a compliance](https://www.financedigest.com/red-box-and-bloomberg-partner-to-provide-comprehensive-record-keeping-and-trade-reconstruction-services-for-financial-compliance.html "Red Box and Bloomberg Partner to Provide Comprehensive Record Keeping and Trade Reconstruction Services for Financial Compliance"), lending and remittance perspective to their users.

Some of these community banks are [transforming](https://www.financedigest.com/transforming-the-banking-experience-to-be-mobile-first-and-people-centric.html "Transforming the banking experience to be mobile-first and people-centric") themselves to become sponsor banks for Fintech programs – their bank charters can help power the Fintech evolution. Through the transformation, they will become part of the BaaS eco-system sponsoring specific regulated services [behind the disrupting tech](https://www.financedigest.com/whats-the-tech-behind-regtech.html "What’s the tech behind regtech?") companies/program managers (eg. Think Synapse, BrightFi). This will embed them into the user [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") flows where users want their financial options. Those that don’t adopt will likely cease to exist.

**What will FI’s look like in 2030?**

With the FI’s evolving and becoming more of the ‘powered by” [regulated enablers behind the BaaS service providers and Neo/Challenger banks](https://www.financedigest.com/exclusive-u-s-regulator-seeks-sale-of-silicon-valley-bank-signature-bank-portfolios-sources.html "Exclusive-U.S. regulator seeks sale of Silicon Valley Bank, Signature Bank portfolios-sources"), the Neo/Challenger bank will evolve rapidly. The push to date for Neo banks has been to push the [digital](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") banking advantages of easier, cheaper and more tailored user experiences to a broader group of users. For instance, Neobanks [focus on specific domestic targeted groups](https://www.financedigest.com/pizza-group-dp-eurasia-sharpens-turkish-focus-as-russia-risk-high.html "Pizza group DP Eurasia sharpens Turkish focus as Russia risk high") such as Millennials, Gen Z, and high-worth individuals (eg. Chime, SoFi).

These Neobanks will get pressure from new Neobanks and from embedded [financial services](https://www.financedigest.com/the-future-of-financial-services-tech-evolution-not-revolution.html "The future of financial services: Tech evolution not revolution ") embedded in the user flows by BaaS providers via telecoms, Apple, etc. that are closer to the use cases of the Neobank users.

**What does Gen Z want from FI’s?**

Embedded, embedded, embedded! Gen Z is looking for accessible, no-friction [services that can follow them where they need](https://www.financedigest.com/top-5-seo-services-you-need-to-succeed-in-2022.html "Top 5 SEO Services You Need To Succeed In 2022") to. [Crypto will also likely become](https://www.financedigest.com/belaruss-high-tech-park-announces-second-phase-legal-framework-cryptocurrency-industry-bid-become-leading-crypto-nation.html "Belarus’s High Tech Park Announces Second Phase Of Legal Framework For Cryptocurrency Industry In Bid To Become Leading Crypto Nation") more important to Gen Z, mainly as the Web3 world develops.

**Are there any new trends on the horizon that you think will reshape FIs?**

We are [seeing a new trend of Neobank solutions that are focusing on very targeted](https://www.financedigest.com/capgemini-comfortable-with-top-end-2022-targets-but-sees-demand-slowing.html "Capgemini ‘comfortable’ with top end 2022 targets but sees demand slowing") international use cases. They are focusing on the cultural aspects of users’ [finances](https://www.financedigest.com/ai-is-the-new-password-security-and-ease-for-finance-users.html "AI is the new password: security and ease for finance users ") that are different for different users worldwide. They [build solutions](https://www.financedigest.com/meet-tilak-joshi-the-fintech-ceo-building-modern-solutions-for-the-gig-economy.html "Meet Tilak Joshi: the fintech CEO building modern solutions for the gig economy") that cater to the beliefs, values and experiences that users from other regions want due to their specific cultural or economic situation. With so many users working cross-border digitally, we see an increase in the demand for US and European-held [bank accounts](https://www.financedigest.com/are-banks-ready-for-the-new-accountability-regime-in-2016.html "ARE BANKS READY FOR THE NEW ACCOUNTABILITY REGIME IN 2016?") for these workers who want to hold their funds outside of their home country to protect against deflation and to have more stability. We also see experiences like Shared family [financial services that are more common](https://www.financedigest.com/3-common-financial-hurdles-for-the-self-employed-and-how-to-overcome-them.html "3 Common Financial Hurdles for the Self Employed (And how to Overcome Them)") in other parts of the world- think extended family savings – another example would be. With these types of use cases, cross-border payment capabilities will be critical to help users move and [manage their finances](https://www.financedigest.com/how-parents-can-help-students-manage-their-finances.html "How Parents Can Help Students Manage their Finances") across borders.


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