Future Vision: Retail Banking in a Digital World
The COVID-19 pandemic has evidently caused the economies and financial service institutions (FSIs) in many countries to suffer due to the unprecedented decline in transactions.
It’s clear how stay-at-home measures to avert the virus have encouraged people to use mobile and online banking. So, will customers still need to go to the bank?
Operating on limited capacity
The halt in physical and economic activities has slowed down branch banking, and resulted in closure of branches and reconfiguration of operations for business continuity.
I’ve read from the Financial Brand that the future of branch banking post-COVID “will be very different,” and that the impacts will last long.
Some of the impacts are expense reduction, stall of availment of financing products (home and car loans), the possibility of mergers, and increased focus on digital technology in their services.
Focus on digital banking
While a lot of FSIs have gone digital in recent years, I think many are still reluctant to change. Customers are more confident with branch banking as well, but during the pandemic it’s the best and safest choice to do banking, and banks will need to adapt.
I saw an article by IBM that said, “The post-COVID-19 environment will continue to see expanding channels, increasing interconnectivity, digital platforms, and 24x7 access. ”
Digital will have to advance as customers are avoiding physical contact and cash money for sanitary reasons and convenience. Virtual and contactless payments are increasingly being used, and will continue to be used even after the pandemic.
Will bank branches need to reopen?
Even when the technology is in place, branches are still relevant, but it will be very different. According to The World Branch Report 2019, branches account for building brand identity and creating deeper customer relationships.
I believe that customer experience is a critical touchpoint, as face-to-face banking helps build trust for more personal transactions such as home or car loans, as well as investments.
“Personalisation and customisation is one way of showcasing expertise that consumers have come to expect,” a white paper by LaMacchia Group said.
This really brings me to think that the tectonic shift brought by the pandemic has really transformed the purpose of retail banking: To create highly personalised in-branch experiences.
So I recommend investing in relevant digital technologies, and training your staff for improved in-person banking, to better prepare your branches for the “new normal.”
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This article is an installment of our Future Vision series, where we tackle insights on Vision AI disruption across industries.
Article originally posted as Branch banking after Covid-19