Banks are directly affected by digitization as consumers prefer online and mobile transactions instead of visiting a bank’s branch. Millennials dictate the evolution of payment systems, as the net worth of this generation is predicted to grow to $24 trillion by 2020.
The customer journey is becoming more digitized, therefore financial institutions have begun to reimagine the new customer experience. Some customers don’t really like branch visits, while younger generations prefer digital banking.
Despite the digital trends, the truth is that people will always need human interaction.
Banks’ managers are worried about the evolution of payment systems created by tech giants, as well as by small fintech startups. There are new, more competitive offers out there targeting younger generations and promising a seamless experience, disrupting the landscape and pushing banks to their limits.
The rate of mobile transactions has grown, and the number of bank branches is decreasing, as the Millennials prefer to transact in a different manner.
Statistics say that by 2022:
Digitization is a reality in a bank and its customers’ interaction. This is why banks should integrate digital innovations faster, communicate better with their customers, and approach the bank-customer relationship through an omni-channel strategy.
Despite the increase in the mobile transactions’ popularity, ATMs, VTMs, and Self Service Channels are still relevant for digital users.
The short answer is YES.
Bank branches still matter as people will always need to have a face to face conversation with a financial advisor or to perform a transaction that cannot be performed through digital channels. Even Millennials will need a branch: 90% of them will choose a bank based on proximity.
The future of banking consists of a mix of technology and physical branches because existent customers and potential clients visit local branches for advice and human interaction.
In 2017, these were the countries with the largest number of branches/ 100.000 adults
Even if many banking services can be delivered remotely, there are still many - complex - banking operations and processes that cannot be provided through digital channels (or could, but with limited success):
Check out some of the customers’ behaviors regarding Branch versus Digital in some of the most developed countries.
The competition with Challenger Banks and Neo Banks is fierce but contrary to what tech enthusiasts say, closing a branch may result in cost increase instead of increased revenue.
The solution in the digital age is Smart and Flexible Branch Banking.
This means implementing digital devices and self-service in branches that enhance the customer journey experience, together with human interaction and advice. The evolution of banks and a 360° banking experience will consist of:
For Banks:
For Customers:
Because Digital Transformation continues to have such a great impact on the way banks develop their strategies and activities, the next step is to see how banks already started to reinvent their spaces in order to attract, impress and engage with their clients.
Many different types of branches worldwide are a combination of creativity, innovation and specific business needs. In this context, The Ebook ”Café, Lounge or Stylish? Pick your branch type.” presents the most popular types of branches designs across the world.