By Alex Manly, Movable Ink’s Associate Director of Strategy for Financial Services, UK & Europe

Before we fast-forward 10 years to consider what banking could look like in 2032, let’s rewind by 10.

2012 was a landmark year for the UK. The Olympics were hosted in London, and bubbling under the surface of all of the bunting and high fives from Wenlock and Mandeville was another landmark for the country as mobile banking went mainstream. According to Bain & Company, 2012 saw 26% of the UK population engaged in mobile banking. And mobile apps, (almost) as we know them today, started to penetrate our daily lives. RBS proudly claimed to have launched the first-ever fully functioning mobile app in 2011 on Apple devices, Android and, to further timestamp the picture, Blackberry. Perhaps as a direct response to this digital acceleration, we also saw an increase of bank branch closures during this period with the number of UK branches reduced by half between 1988-2012.

But just as some of the Olympic records set in 2012 have now been smashed, advances have accelerated in consumer banking. Not just with online banking, which has increased to 93% of the UK population – but further innovations also bore fruit, such as open banking.

As we look ahead to the next 10 years, what can we expect the retail banking landscape to look like?

Three key predictions for 2032:

1. A shift to the true triple bottom line will dominate business agendas

The triple bottom line has echoed throughout the corridors of business schools since the ‘90s, underpinned by the three Ps (profit, planet, people). And, it has certainly had a renaissance of sorts in financial services over the last few years, arguably under a rebrand to ESG. In fact, Reuters notes that in the investments space, ESG funds accounted for 10% of overall global fund assets in 2021, a significant leap from previous years.

The idea of putting people and the planet alongside the profit prerogative isn’t a new one.

But with whistle-blowers starting to question the integrity of ESG claims of some organisations, why haven’t we seen more proactive approaches and transparency in retail banking yet?

By 2032, for financial brands to continue to underpin consumers’ daily lives, the survival of retail banking brands as we know them today will be inextricably linked to the survival of the planet and integrity of their “people” policies.

This will be largely driven by Gen Z, which should come as no surprise as Gen Z’s economic power is forecasted to surpass millennials’ in the next 10 years, with their wealth expected to accelerate by 400% over the next decade. This newly emerging dominant group won’t accept anything less than ethics-first. Forget customer-first; being coined the ‘sustainability generation’, we can expect to see this group vote with their wallets. Furthermore, loyalty as we know it today will move well beyond personal rewards and more towards ethics—and in a big way.

This shift is already happening. We’re starting to see products launched with the planet in mind. Particularly in Europe with the likes of Bunq, who are targeting the Gen Z market with current accounts that link spend to planting trees, or Klarna, with their CO2 tracking app. Or across the pond, the Amex x Parley Ocean plastic Card. These are all great starts, but the next 10 years will see an even greater change. Top of wallet will mean top of ethical practices, not just signals of planet-preserving products. An inside-out refresh of integrity will mean logos are paraded proudly by customers who can see brands’ balance sheets are net-positive on the important two Ps: planet and people.

2. Pensions will have to adapt to the evolving lifestyles of an ageing society

One of my pet-peeves when looking ahead to the future is that we often get stuck in the ‘next generation’ frame of reference. So, despite the other two trends leaning heavily into new-generation predictions, we can’t ignore the fact that an undercurrent of huge change is taking place across populations worldwide. Society is also getting older. The UK Office For National Statistics predicts that by mid 2030, “the number of children (those aged from 0 to 15 years) is projected to decrease by 1.1 million (8.8%). Conversely, the number of people of pensionable age is projected to increase by 1.3 million (11.3%).”

As our lives become longer and healthier, retirement is not only becoming more nuanced, it’s turning into a story with multiple chapters. My father is 71 and retired two years ago. He is currently sending me his Strava locations from a three-week cycling trip he’s doing from London to Rome! When he comes back, he’ll be thinking about part-time work or volunteering opportunities to keep his mind busy. My father is firmly in his active retirement chapter. While his mother is moving into a slightly different chapter – at 94, my father and his siblings are making a decision about how well she can manage independently in her own home. My father’s relationship with finances in retirement is taking on multiple roles (for him and for his mother).

We could argue about whether it is a duty or an opportunity for financial services brands to lean into the expanding needs of retirement and older generations. Be it through more personalised ways to draw down or categorise the risk of pension portfolios at different stages of retirement, or taking a fresh look at equity release and what it might mean as home ownership becomes affordable for swathes of society.

Some movement is taking place already. In the UK, brands like PensionBee are acknowledging that having the opportunity to take more control over our finances in later life will be critical; recognising that our retirement pots may sit in multiple places. The FCA is similarly urging the sector to bring more focus to equity release.

3. Human-centric technology and financial wellness will become indispensable

Searches for the term “financial wellness” have accelerated in the last few years. Once an unheard of phrase, it is now top of mind for people worldwide.

In the next 10 years, financial services companies  will align more closely to lifestyle brands, leaning in to support individual financial wellness in the same way technology has tailored our approach to monitoring our fitness. Step-trackers, watches and apps all come together to support our ever-increasing curiosity about our individual wellbeing and other industries will follow suit.

Right now, we can see the narrative around financial wellness expanding. The litmus test for how brands support their customers’ financial lives was taken pretty immediately after March 2020, when the pandemic hit and customers’ financial outlooks changed overnight. Some brands survived this test well. Morning Consult highlighted that 14% of US consumers trusted their bank or credit union more during this period, while others (12%) reported a diminishing trust. The demands of the pandemic produced a reactive response to supporting people and their financial lives, but the next 10 years will require a more proactive approach.

As the way we earn money becomes more flexible than ever, the way we stitch together our financial lives and well-being will become more dispersed. Gone are the days of the job for life – we’re now moving roles more regularly. Unsurprisingly, younger generations are over-indexing on the appeal of job-hopping, with 75% of millennials saying they see the benefits of doing it, compared with 50% of over 55s.

But it’s bigger than that. Freelancing, the gig economy, and the sharing economy are playing a more dominant role in how we interact with our finances, and financial brands have a role to play in keeping up with this trend. Many brands are already leaning into it in a meaningful way. Mastercard, for example, has highlighted ways it is “fueling the global gig economy” with real-time payments through disbursements, which supports cashflow for those working in the gig economy.

Where financial stability may have previously come from a stable 9-5 and a solid pension plan, our evolving relationship with work will require more tailored financial wellness support. We’re observing some early signs from FinTechs already. For example, Revolut (along with many others) has a budgeting tool which pings you when you reach a spending limit you’ve set for yourself. Newer kid on the block, Cleo, is doubling down on overall financial wellness with a Gen Z-friendly approach to budgeting and building a credit score, and Your Juno is breaking the taboo of talking about money, one new-to-investing woman and non-binary person at a time.

Looking ahead, AI will flip the script to a more proactive approach. When done ethically, financial services can establish a force for good using a predictive methodology to help guide people through the ever-increasing complexity of their relationships with money. Fast-forwarding to 2032 (as you fight for the seat to be a spectator at the Brisbane Olympics), imagine having a financial guru in your pocket that can predict the best way to finance the trip, including linking with your Airbnb or Uber income and mapping out necessary savings goals to get there?

If the last 10 years saw the major digital shift and change in society’s relationship to banking technology, the next decade will witness iterations in lifestyle and the relationship with the world around us.

About the Author:

Alex Manly is Associate Director of Strategy for Financial Services, UK & Europe

at Movable Ink. In her role she works hand-in-hand with some of the world’s leading B2C fintech brands to formulate forward-thinking digital marketing strategies. She joined Movable Ink from American Express and brings with her a wealth of financial services marketing expertise from 10+ years in the industry.