At one point it was widely assumed that branches would soon go extinct as younger generations increasingly preferred doing transactions online. However, fintech firms and digital challenger banks have changed this landscape dramatically.
They are shaping a bright new future of banking by shifting value chains from linear to ecosystems that meet customer needs in novel ways, disrupting traditional bank business models while forcing them to change and adapt over time.
1. Convenience
Branchless banking provides customers with great convenience. No matter if they reside in urban centers, tech-savvy rural regions or somewhere in between, customers can easily access banking services on their smartphones without facing distance restrictions, shift worker scheduling issues or bureaucracy that impedes setting up accounts or creating long-term investments.
Customers of digital-only banks do expect effective customer service and a safe online experience from them, but thanks to emerging technologies like artificial intelligence (AI), computer vision and advanced analytics transforming the industry by making banking experiences faster, more engaging and personalized – and Intel is providing these capabilities through intelligent edge and network infrastructure solutions.
2. Personalisation
Although much has been made about branches being replaced by digital offerings, brick-and-mortar banks will still need to offer customers tailored services through both in-person and digital experiences.
Personalizing means understanding the unique preferences of different customers. Some may prefer traditional channels like phone calls while others may prefer mobile apps or chatbots for receiving communications.
Bankers can leverage advanced technology to offer hyper-personalized banking services that cater to each individual, responding to specific life events that arise and helping them reach their financial goals. This type of service will be sought by millennials as a way of remaining loyal to their institutions.
3. Automation
Even as digital banking grows in popularity, some customers still prefer visiting physical branches for personalized service. AI, data analytics and automation technologies offer new ways to enhance customer experiences at brick-and-mortar locations by unlocking insights and improving processes.
Automation can help banks reduce risks and operational costs by detecting patterns that might otherwise escape human attention, speeding up fraud investigations, allowing instant account freezes within seconds and streamlining other functions. Banks can use low-code technologies like document AI or RPA to automate routine tasks without altering existing systems or processes.
Intelligent automation can significantly boost financial inclusion and bank credibility by eliminating obstacles to access such as long journey times or hours that don’t suit shift work schedules, thus helping financially illiterate individuals develop skills necessary to participate in our economy.
4. Security
As customers move from physical branches to self-serve models of banking, security must remain the top priority. Technology such as AI, IoT sensors and dynamic digital signage will assist in making systems robust against hacking attempts.
An efficient branchless approach will also expand services into rural areas more effectively, through partnerships with fintech companies, like Safaricom’s and PayPal’s partnership in Kenya allowing M-PESA customers to deposit and send funds.
Customer experience has become an essential factor for banks, making a branchless approach an attractive option. This can be accomplished by combining convenience with personalization while using AI and machine learning technologies to gather insights that will be used to customize services according to customer preferences and expectations.
5. Data
Financial experts may argue that branch banking will soon become obsolete as young people increasingly complete transactions through digital means; but one thing remains certain – branch banking will remain.
Banks looking to protect themselves in the future need to create an comprehensive strategy incorporating data and technology, incorporating emerging trends such as blockchain for enhanced security and AI for personalized customer services.
Traditional financial institutions may enjoy loyal customer bases, economies of scale and strong balance sheets; however they cannot rest on their laurels and take for granted their position as market leaders. Instead, they must adopt a “challenger mindset”, embrace digital innovation, customer-centric approaches and provide competitive edge against agile new players if they hope to survive and thrive in this new era of low growth, high risks and geopolitical instability.