The year is winding down, the Hallmark movies are being watched (or avoided—either way, we don’t judge), and the fruitcake recipes are being dusted off once more.
With the end of 2024 in sight, we are left wondering what changes are on the horizon for 2025 within the banking world. We don’t have all the answers, but we see a few trends emerging in the very immediate future worth discussing.
AI Regulation and Oversight
Artificial Intelligence (AI) has been a hot-button topic for a few years now. Various forms of AI have already been adopted across many industries—including the financial world—and with this development comes the possibility of even greater oversight from regulators and legislators.
While it is hard to gauge exactly what will happen in Washington, the new year may see lawmakers laying the groundwork for legislation designed to eliminate unethical AI. Whatever happens, it will be critical for FIs to navigate this rapidly changing landscape in 2025.
AI Assistants in Customer Service
Autonomous chatbots are becoming increasingly sleek and sophisticated, a highly convenient tool for any institution wanting to offer customer service and support 24/7—well outside regular business hours. These interactions are also becoming increasingly complex. As technology rapidly evolves, these bots will likely be able to handle more complicated problems and tasks that require multiple steps. They will be able to anticipate the customer’s need with greater ease, leading to a more personalized AI customer experience.
In a similar vein, AI will become more adept in handling day-to-day tasks within FI branches. Duties such as data entry, fraud detection, and processing transactions are all things AI is becoming equipped to handle with greater accuracy and finesse.
Changing of the Guard?
These AI developments are coming into play alongside a change in workforce demographics, with Baby Boomers and even some Gen Xers leading the charge towards retirement. This means younger Millennials and Gen Zers are launching their professional careers and making up much of the frontline staff in community FIs.
Since this younger generation is no stranger to digital strategies and problem-solving, how can FIs best capitalize on this expertise to enhance the overall customer experience? Perhaps if AI can help free frontline bankers from more mundane tasks, these frontline employees will have more time to dedicate to personalized customer service, counseling accountholders one-on-one with the best information regarding their needs and desires.
By fostering an exciting and collaborative working environment, banks and credit unions can emphasize communication and transparency both within their organizations and for accountholders. As new generations of leaders emerge, the question becomes: What processes can be put in place to better equip younger staff to efficiently serve their customers/members?
Branches are More Relevant Than Ever
Online & mobile banking has revolutionized day-to-day transactions, and AI has the potential to increase the value of those tools. That said, is there still room for the branch experience? The answering is a resounding “Absolutely!”
According to data from J.D. Power[1], digital-only customers are significantly less satisfied than people who bank digitally and use physical branches/locations. The percentage of consumers banking digitally continues to rise, but three-quarters of them still visit their institutions.
As you might guess, America’s biggest banks have a larger share of customers who are digital-only users, but these mega-banks fall short when it comes to the in-person customer experience. This is where community financial institutions have a distinct advantage.
This is the perfect opportunity for community FIs to capitalize on these quality face-to-face interactions, and for frontline staff to be the keepers of accountholder/FI relationships in 2025.
The Moral of the Customer-Service Story
AI now plays a role in FIs of all sizes, and there’s no reason to doubt that its presence and impact will grow. However, just as mobile banking can’t replicate the nuance of in-person transactions, even highly advanced AI can’t replicate the experience of walking into a branch, being greeted by someone you know, and working with them to find a solution for any issue or goal you might have.
The data supports what we know intuitively, which is that banking is more than just depositing a check or getting a loan. It’s about being seen, understood, and served by another human who cares about your financial goals and well-being.
[1] https://thefinancialbrand.com/news/banking-branch-transformation/branch-digital-banking-consumer-satisfaction-83493/