Banks Shift Focus to Behavioral Metrics for Customer Trust by 2025

In the rapidly evolving landscape of banking, traditional metrics such as credit scores, income brackets, and spending levels are no longer sufficient to assess a customer's trustworthiness. By 2025, the focus is expected to shift towards behavioral metrics, rewarding consumers for their sustainable and ethical choices rather than just their spending habits. This transformation is driven by the increasing demand from consumers, particularly Gen Z and millennials, who prioritize values and sustainability in their financial decisions.

Banks today face a critical challenge: they must adapt to the rise of super apps that offer seamless ecosystems integrating commerce, lifestyle, and payments. These super apps, already dominant in markets like China, are setting a new standard for customer experience. Meanwhile, consumers are increasingly expecting brands to drive positive change towards sustainability, with a significant portion losing respect for brands that do not prioritize environmental responsibility. Traditional banks, which have relied on points for purchases and fee waivers for deposits, are at risk of being left behind.

To stay relevant, banks must shift their focus from technological catch-up to leading on values. This means integrating environmental, social, and governance (ESG) signals directly into how customers are scored, segmented, and rewarded. Such a model not only builds deeper loyalty but also reveals new cross-sell opportunities and alternative credit risk indicators. For instance, eco-loans for electric vehicles (EVs) and considering rent payments and utility bills as credit indicators are examples of how banks can adapt to this new paradigm.

Critics may argue that embedding lifestyle choices into financial products is invasive or biased. However, banks have always rewarded behavior; they just haven't been rewarding the right ones. The financial system has traditionally incentivized volume over values, but today's consumers live in ecosystems, not ledgers. They want their financial institutions to serve as life partners, not just service providers. A tiered-reward system that tracks and supports low-impact lifestyles is both practical and achievable. Imagine a world where someone who consistently rides public transit, eats sustainably, or improves their sleep gets lower loan rates or higher-yield savings. This is not a distant dream; the technology to implement such systems already exists.

Early signs of this shift are already visible. Forward-thinking fintechs are exploring behavioral indicators that measure financial responsibility through spending habits, not just income. For example, Mastercard has developed a Carbon Calculator in collaboration with a Swedish fintech, allowing consumers to track the carbon footprint of their purchases directly within their banking apps. This tool has been integrated by over 50 banks worldwide, aiding millions of users in aligning their spending with their environmental values. A behavioral approach also allows banks to be more adaptive and human, treating people recovering from financial setbacks with nuance and understanding.

In a 2024 report, analysts warned that banks risk losing customer loyalty and brand differentiation if they fail to integrate more deeply with broader digital ecosystems. The Gen Z generation sees their financial provider as a reflection of their ethics, expecting better transparency and leading social change. The shift is clear: consumers are managing meaning as much as money. They aren’t just looking for convenience; they’re looking for alignment. Banks that ignore this are already losing relevance, with one in five consumers switching banks due to poor customer experiences and lack of relevance. Banks that move now have a narrow but powerful way to lead, not with marketing language but with product actions that reward the kinds of decisions the world needs more of. This is no longer about positioning; it’s about permanence.

The future of banking will be defined by trust, not just trust in security but trust in values, vision, and shared purpose. The banks that win will be the ones bold enough to say that what you believe matters more than what you earn. This transformation is not just about survival; it’s about leading the way towards a more sustainable and ethical future. Banks that embrace this change will not only stay relevant but also become the trusted allies of their customers, reflecting their values and aspirations in every product and service they offer.