We’re a little over halfway through 2023, but it feels like we’ve already seen more than a year’s worth of major banking news since January.

With all due respect to the impact of generative AI—which we anticipated in our Top 10 Banking Trends for 2022—the biggest overall story so far this year is probably the continuing climb of interest rates. As I write this, the deposit section of bankrate.com is littered with APYs north of 4% and some past 5%. The downstream effects of higher rates shape every part of banking.

This includes exposing risks in many dimensions of the financial services system— most notably the run of banking failures kicked off by the collapse of Silicon Valley Bank in March. Our expectation that something like this might happen is why we named “Risk everywhere” one of our Banking Top 10 Trends for 2023 back in January.

But there’s a twist to the risk that we didn’t identify at the time. With the notable exception of the Credit Suisse takeover, all banks to fail so far have been American. This is driving a global market divergence. American banks are in turtle mode, pulling their heads inside their shells amid news that regulators plan to boost their capital requirements. Banks in Europe and elsewhere, meanwhile, are seeing record revenue and trying to find the smartest investment for the windfall profits.

Since we’re about the same distance from the publication of our 2023 and 2024 trend reports, this is a great moment to check in on the impact of the trends we identified back in January. So with the caveat that around half the year is still to come, here’s my mid-flight assessment of our Top 10 Banking Trends for 2023.

Rising rates catalyze product innovation

We’re still waiting and seeing on this one, but I think it’s inevitable that rising rates will push banks to try new things—and that one of them will be an Amazon Prime-like offering that aimed at creating more holistic customer relationships.

My hunch rests on the fact that banks today are customer-centric with their experiences but not their value propositions. An Accenture Research analysis of leading banks in nine markets found that less than 15% of them run a comprehensive program that rewards customers who increase the number of products and services they hold with the bank. The first-mover’s advantage is there for the taking, and I know of several banks that are hustling hard right now to seize it.

The renaissance of the branch

This one gets a thumbs-up that keeps getting bigger every day. Banks are experimenting with branches, like the cash-free ones we’ve seen in the UK, and opening new ones. Bank of America, for instance, announced in June that it plans to build 55 new branches this year after opening 58 in 2022. Singapore’s OCBC opened a branch in Wuhan this spring, bringing its total in China to 19.

What’s behind this? Our most recent global banking consumer study found that consumers of all ages value seeing branches where they live. (We even found they are growing in number in Finland, one of the famously branch-averse Nordics.)

But today’s branches look different. Expect banks to experiment, innovate, and reinvigorate their branch networks. Our research confirms that branches still matter in 2023, and that should persist for the foreseeable future despite the uncertain times.

The metaverse demystifies

You could say we had rose-colored glasses on for this one, but I still think the metaverse will create opportunities for banks in the long run. Apple’s Vision Pro headset, announced this summer, puts me in mind of the smartphone revolution. The Vision Pro is to the metaverse, I think, what the launch of the first iPod was to the smartphone revolution: a crucial stepping-stone on the way to revolutionary change. It will arrive, just not as early as I thought.

Risk everywhere

This might be the most important trend in global banking right now. At the risk of sounding like a gloomy Eeyore, I must mention that the regional banking crisis noted above is not the only story here. 

Many economic observers in banking and beyond are clearly worried about commercial real estate in America. The world of work, post-pandemic, seems to include a lot less demand for office space. Valuations from San Francisco to New York City have been in free-fall for all of 2023 and there’s no end in sight.

And that’s not all. Debt as a portion of household income rose steeply in the 17 years of near-zero interest rates after the 2008 global financial crisis. The main driver of this climb was mortgages. Many of these have yet to come up for renewal since rates began to climb – for example, there are 2.4 million fixed-rate mortgages in the UK due for renewal between now and the end of 2024. As renewals arrive, the affected mortgage holders will need to allocate a greater portion of their income to mortgage payments at a time of significant inflation. In short, we seem to have all the ingredients for a major consumer finance crisis building.

Though I hate to admit it, this trend feels like an absolute bullseye to me now. Here’s hoping it feels a little less prophetic in six months.

Fintechs—from disruptors to innovators

If you define a “unicorn” as a private business with a valuation of over $1 billion, the world of fintechs produced only one in the first quarter of 2023. This is the lowest birthrate since 2016, and another sign that the golden age of fintech disruptors is over. Another is the collapse of leading crypto fintechs like Celsius and FTX, along with the regulatory pressure facing Binance.

In this new environment, fintechs are much more likely to partner with incumbents or even be acquired. Deals like Visa’s acquisition of Pismo make me rate this trend a solid hit.

Life-centricity—from customer journeys to intent

Our most recent global banking consumer survey showed that banks may have crossed the “too much of a good thing” threshold on digital experiences. Almost every banking app around the world gets near-perfect reviews from customers. But our research found that only 25% feel their bank does a great job being aware of important changes to their personal or financial situations.

This can be turned into an opportunity—if banks can capture the digital dividend. With 99% of customer touchpoints now digital, banks should be able to move from charting customer journeys to truly understanding customer intent.

As the saying goes, it’s hard to make predictions—especially about the future. But 2023 is still a long way from over and many of our top trends are already reshaping banking around the world.  

Read our full Top 10 Banking Trends for 2023 report. And if you’d like to discuss the future of your bank or the industry, I can be reached on LinkedIn.

This article is adapted from an earlier version, “It’s time to check-in! Banking Top 10 Trends for 2023,” which was published on LinkedIn.