Deloitte – Banking & Capital Markets Outlook, 2024

The banking industry is expected to face challenges in 2024 due to a slowing global economy and a changing economic landscape. Banks will need to find new ways to generate income and manage costs. There are multiple disruptive forces, such as higher interest rates, reduced money supply, regulations, climate change, and geopolitical tensions, that are reshaping the industry. New technologies and emerging trends are also influencing how banks operate and serve customer needs. Generative AI, industry convergence, embedded finance, open data, digitization of money, decarbonization, digital identity, and fraud will have a growing impact in 2024. While banks are generally in a good position, their revenue models will be tested. Organic growth will be limited, forcing banks to seek new sources of value in a capital-scarce environment. Investment banking and sales and trading businesses will need to adapt to changing competitive dynamics. The growth of private capital will challenge these sectors to provide more value to corporate and buy-side clients. The shocks experienced by the banking industry in early 2023 have prompted leaders to reassess their strategies. Regulatory changes to capital, liquidity, and risk management for US banks are among the focus areas, but there is still a lot that needs to be done to evolve business models.