15.6 Trends in Financial Institutions
- What trends are reshaping financial institutions?
What factors will influence financial institutions in the coming years? The latest reports suggest there will be a continued focus on regulatory and compliance issues (especially after financial crisis of the Great Recession), as well as on operational efficiency and technological advances.
Banks will continue to tackle customer engagement and technology initiatives over the next few years. According to a 2025 report by Evolution Partners, a global consultant firm that forecasts banking trends, technology continues to empower consumers to control their banking experiences. Additionally, the inclusion of AI and cybersecurity concerns are at the forefront in the coming years. The term "responsive resilience" is identified as a key trend as financial institutions navigate the opportunities and challenges of new technologies and ever-changing regulations.18
Financial technology (or “fintech” services) will continue to disrupt the banking industry and provide opportunities for banks and other institutions to work closely with fintech companies that can help them innovate and streamline their business practices. Data indicate that fintech firms are estimated to reach $1.5 trillion in revenues by 2030, which represents 25 percent of banking across the globe. Services offered by fintech firms include digital payments, P2P lending, online money transfers, and personal finance management.19
Mobile financial apps will continue to be a strategic advantage that separates traditional banking approaches from innovative companies that can offer their clients a connected, digital experience when it comes to their money and investments. Consumers will expect personalization of bank products and services as part of their routine interaction with financial institutions. Otherwise, they will look elsewhere for a competitive platform to meet all of their financial and banking needs.20
Many banks continue to offer local branch offices, but online and mobile services will continue to grow in popularity. Most banking institutions offer apps that give customers the convenience of moving money between accounts and mobile check deposits that expedite when money is available in their account. In addition, online payment platforms such as PayPal, Cash App, Square, and Venmo continue to make both personal and business transactions seamless. Customers expect access to banking needs to be quick, efficient, and readily accessible when needed.21
Managing Change
Chatbots Help Banks Connect with Customers
Computer software using artificial intelligence (AI) to simulate conversation with humans, chatbots have become an integral part of the banking industry’s push to connect with customers while keeping operations and costs in line. They can be an effective tool in what banks call “conversational commerce”—interacting with customers via messaging and digital platforms.
Typically banks engage their customers through various channels, including human channels (in-person transactions or service calls with a live agent) and digital channels (websites, mobile apps, e-mail, and online ads). Although customers may have a favorite way to interact with their bank, these channels can cost banks a substantial amount of money, and financial institutions are constantly looking for ways to reduce costs while maintaining quality customer service.
It is not surprising that in-person transactions are the most expensive service provided by banks; however, not every transaction with a customer requires human intervention. As technology continues to evolve, more banks have figured out they can leverage their services to fit the everyday activities of their tech-savvy customers by using chatbots as the next step in customer service.
For example, as mentioned in the opening feature in this module, Bank of America introduced Erica, a voice- and text-enabled chatbot that helps customers make smarter banking decisions. Erica sends customers notifications, points out areas where they can save money, updates credit ratings, and can help facilitate bill payments within the bank’s mobile app.
Capital One, another player in the U.S. banking industry, launched Eno, a text-enabled chatbot that helps customers manage their money via smartphone. Customers can ask Eno questions about account balances, credit history, recent transactions, payment history, etc. via text messaging. Eno is the second virtual assistant created by Capital One; it already has in place Alex Skill which allows customers to conduct their banking business through voice in conversations with Alexa.
AI chatbots provide benefits to both banks and customers. Banks are using them to streamline operations, automate customer support, and provide a convenient and positive customer experience. Customers rely on this type of digital assistant to make their lives easier and keep them current on personal and business transactions without having to wait on hold for a person to respond to questions that can easily be answered by chatbots. A report by Deloitte in 2025 found that 63 percent of customers have interacted with banking chatbots. The data collected indicate that more than half of the usage was for technical support (60 percent) and inquiries about their accounts (53 percent). A large majority, nearly three-quarters of customers, prefer human interaction, even for routine transactions. With nearly 4 billion users of mobile banking worldwide, chatbots can be an effective tool to help banks become more efficient, more proactive in anticipating customer needs, and more sensitive to their bottom line.
- Do you think chatbots will eventually replace customer service representatives at U.S. banks? Explain your reasoning.
- What are some advantages and disadvantages of using a digital assistant as part of your banking routine?
Sources: Yue Cathy Chang and Cindi Thompson, “Chatbots in Banking,” Silicon Valley Data Science, https://svds.com, accessed September 11, 2017; Maruti Techlabs, “Banking Chatbots,” https://chatbotmagazine.com, accessed September 11, 2017; Blake Morgan, “5 Ways Chatbots Can Improve Customer Experience in Banking,” Forbes, https://www.forbes.com, August 6, 2017; Elizabeth Mills, “How 10 Big Banks Are Using Chatbots to Boost Their Business,” https://www.abe.ai, March 13, 2017; Kristin Korzekwa, Val Srinivas, and Shivalik Srivastav, "AI Banking Chatbots: From Frustration to Delight," The Wall Street Journal, https://deloitte.wsj.com, August 19, 2025; Joseph D'Souza, "Mobile Banking Statistics and Facts (2025)," Sci-Tech Today, https://www.sci-tech-today.com, November 28, 2025.
Concept Check
- How will fintech services enhance the overall banking experience?
- What challenges do banks face when it comes to offering local branch services to customers?