What will banking in the 21st century look like?

Well, we’re already here, but we’ve got a long way to go. And banks have already come a long way. Whether you’re Utah’s premier community bank or a huge multi-national conglomerate, banking has undergone major shifts in the past few decades. For small businesses around Utah – whether in Salt Lake City, Lehi or otherwise – the changes can seem positively dizzying. And the change is not relegated to the United States alone. Let’s take a closer look at how changes in innovation and banking help keep businesses afloat.

Take the universal banking model in France as one example. In France, large, integrated banks and bank assurance groups combine their capabilities to offer deposit-taking services, credit services, and other modern financial services. Consider that in the 21^st century we have already experienced several major disasters The first was during the Great Recession and the second was the COVID-19 pandemic.

In both disasters, the universal banking model in France was able to meet companies’ financing and cash flow needs. Even more, French banks facilitated the stimulus roll-our measure decided by the French government and European Central Bank. Could a universal banking model benefit other countries that currently don’t utilize it?

Big changes at big banks and beyond

A central theme of this article looks at the evolution of banking over the next decade and beyond. The banking sector and financial industry are likely to be subject to a major degree of structural and operational change as new technologies and capabilities disrupt the industry. These disruptions lie at the heart of change in the banking sector.

Some of the inherent comparative advantages wielded by banks (and which have sustained their dominant position) are slowly being eroded. Even as a bank ourselves, we are a community bank serving Utah-based businesses and we understand the pressures banks operate under. The pressures coming to bear on banks have the potential to transform the entire structure of the global banking and finance sectors.

These changes will come in the type of business undertaken by banks, the type, and range of institutions conducting banking business, and the way that traditional banking business is carried out. They are also likely to affect the internal structures of the banking firm as banks move towards a digital banking structure.

What is the long-term view of the banking industry? There are two ways to approach the question. One, in the long run, what secular pressures weigh on the banking sector, and two, how can these pressures be resolved in three dimensions? Banking institutions must evaluate the changing structure of the banking industry, the business operations of banks, and the overall structure of the banks themselves.

Why are these changes so important?

There is a good reason why these changes need to occur, and why they may be so substantial. The reason why the changes could be so game-changing lies in the powerful combination of pressures operating on the banking and finance sectors. Some of these pressures exist at the very core of the banking business. One such example is information gathering, storage, and delivery.

Technological pressures also do not ebb or wane, but only get more intense as we move deeper into the 21^st century. Banks must manage these new systems and technology concerning data, trading, and effective delivery of financial services. If there is one thing we learned from the industrial revolution, it’s that the development of new technology can have a major impact on any industry and has often done so.

This is most especially the case when technology affects the very core of the business – in the case of banking information, processing and delivery of information. When it comes to handling data and transmitting information, banking is no different from other industries. It is largely technology, and what follows from it, that will transform the banking and financial services industries. Financial institutions, companies, and individuals must learn how to work within the new framework of technology and banking.

Banking Will Change Dramatically in 10 Years

“Change is the law of life. And those who look only to the past or present are certain to miss the future,” said John F. Kennedy. Those words still hold true today. Still, when imagining what lies ahead in the next decade of banking, it helps to examine several patterns that led us to where things currently stand at the intersection of technology and finance. And it’s also important to understand that the needs of a community are unique.

Over recent years, smartphones and mobile devices have revolutionized our lives. Through their invention and innovation, they have brought all manner of products and services to humanity’s fingertips, and ideally, this will extend to banking and financial services. Ultimately, money brings security, success, and/or adventure. One’s banking and financial services should be a guidepost toward a healthy and happy life, not an obstacle.

When we look at banking and finance trends, it becomes obvious that the future of banking is still very much unknown. Yet, there are clues. Expect it to be technology-led. We will also see embedded finance services will lead the way in providing amazingly smooth experiences. This will contribute to the third aspect, which revolves around unprecedented levels of convenience for the customer. Here at First Utah Bank, we hope to provide Utah-based businesses with just that.