The Current Account: End of Year Round Up

2022-12-15 |  Chirag Soree

As we approach the end of the year, we thought it’d be a great opportunity to check in and see how we got on with the predictions we made this time last year, and to look at the key themes that will shape our industry in 2023 and beyond.

We hope you enjoy the read, and we wish you very safe and happy holidays from everyone here at PEN.

A brief look back at 2022…

In keeping with tradition, we thought we’d reflect on the predictions we made for 2022 and see how we got on…

What we got right…

Thankfully, we are able to talk about Covid in the past tense, but the changes it forced firms to make are still being embedded.

We predicted one of those changes would be the adoption of new Ways of Working and the investment in remote working technology. This has indeed been a focus for the majority of organisations across banking, insurance and other industries and a trend that will continue into 2023.

We also predicted an increased visibility of ESG in organisation’s strategies, and in their operations, product, and sales decisions. This has certainly been the case, with ESG now at the centre of many bank and insurer objectives.

As with most years, we said that Banks and Building Societies would continue to focus on identifying opportunities to cut costs in what would be increasingly tough market conditions. This has absolutely been realised with thousands of branch closures in recent years and this continued in 2022 as Banks and Building Societies continue to evolve their digital offerings underpinned by AI, RPA and better data management.

We also saw the regulators continue to put pressure on 3rd party suppliers to meet minimum resilience standards and to carry out resilience testing.

What we nearly got right…

The mortgage market remained as competitive as ever but with the significant challenges the global economy is facing, we didn’t see lenders step into higher risk areas for better returns.

Change investment remained trimmed down for 2022 but not to the level we predicted, as we saw firms investing in more than just legal and regulatory commitments, digital transformation, and data.

What we got wrong…

No one gets everything right, and we’re no different! Three of our predictions didn’t come to fruition.

We expected to see interest rates staying low, which clearly isn’t the case! There have been hints at possible Merger & Acquisition activity, but not at the headline-grabbing level we predicted. 

Lastly, we didn’t see as much collaboration as predicted between banks, building societies, and Fintechs.

What are our predictions for 2023?

Here are our top predictions for 2023, we’ll check in on these this time next year to see how we fared…

Macro-economic environment

Despite cost of living increases and the tougher macro-economic environment, don’t expect a deep recession or high unemployment. 

Market factors

Interest rates will remain higher than the historically low figures we been used to due to the slow response from the BoE in an effort to tackle the inflation and public debt that burdens the economy. 

Housing market

Rising mortgage rates will cause a shaving on the value of people's homes, but not as significant as expected.

Customer movements

Despite higher interest rates and the efforts of disruptors, customers switching banking providers will remain at low levels. Customers have collectively displayed a high degree of inertia over the last decade and we don’t expect this to change.

Big Bang 2.0 Proposals

The reforms the government announced looking to reshape the banking sector and turbocharge the UK’s growth will have little impact on the sector in 2023.

Innovation spend

Innovation spend will be reduced as banks re-route spend to target cost saving in response to the tougher economic climate.


Organisations will be driven to outsource more non-core activities where the cost of maintaining is becoming more untenable for them, particularly smaller organisations, such as keeping up with the latest technology.

Digital first

Consumers will continue to demand digitisation of services, with further reduction in branch services as banks move to become digital first and provide more financial services to support customers in dealing with inflationary pressures.

AI & Robotics

The incumbent banks will increase their investment into robotics and Artificial Intelligence to improve customer account management and enquiries, leading to a reduction in frontline services/workers and closure of branches, delivered as a cost reduction measure. 

Regulating consumer tech

The move towards becoming a cashless society will continue, with further growth in contactless payments in the wearables space. As a result of this and further scams such as Authorised Push Payments, expect increased regulation to counter the increased risk of account breaches and hacking. 

Green products

The market for "green" products will grow, driven in the short term by the cost of living crisis as these products encourage more environmentally considerate behaviours.

Consumer fairness

Consumer fairness will continue to drive change across financial services. Banks will find it challenging to reconcile the new changes and rules driven by Consumer Duty with existing requirements and in-flight change programmes, due to complexity.

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