As society moves more and more towards a digital future, the closure of retail bank and building society branches is anticipated to accelerate.
For high street banks, such an outlook is understandably concerning. Without branches, how will customers access their bank’s services? How will banks increase revenue and deposits? Will the traditional bank simply cease to exist, replaced by slick online operations run by behemoths such as Amazon? I believe the answer is no, but only if high street banks take strategic steps now.
Let’s face it: banks are already losing customers, but it’s not because their branches are closing. It’s because more and more of their customers – thanks to their daily experiences and high expectations set by digital-first companies such as Netflix, Uber and Amazon – are choosing to bank online.
As the use of bank branches falls and the rate of mobile interactions increases, high street banks have reached an impasse. They can cling harder to their bricks-and-mortar buildings despite the message customers are sending, or they can move towards the digital technology that will help them evolve their services and offer their customers what they want and need.
Of course, truly transformative digital technology — the kind that high street banks must embrace — isn’t a one-and-done process. To wield it successfully and see positive impacts, banks must prioritise collaboration, communication and customisation.
In the past, some banks have shied away from digital technology because they didn’t have the time, resources or talent to develop in-house solutions. Rather than building new processes from scratch, many banks are finding it easier and more cost effective to invest in strategic partnerships with fintech companies. These fintechs work with the banking industry as technology providers, helping financial institutions to improve their services, increase efficiency, save time and take advantage of cutting-edge tools. This leaves bankers free to focus on customer relationships, resulting in the high-tech, high-touch experience that today’s consumers expect.
When it comes to loan applications, people generally have two questions: am I approved and when can I get my money? They expect quick, convenient service, whether they’re ordering takeaway or applying for a loan. By investing in digital technology that keeps data in a single, accessible and secure location, the banker can immediately answer these questions—either in person, on the phone or via a mobile app — and keep the lines of communication open, cultivating deeper relationships with existing customers and getting off on the right foot with new ones.
No two financial institutions are alike and a bank’s ability to differentiate itself from the competition is integral to its success. Cloud-based solutions and software as a service (SaaS) providers understand this and offer a collaborative partnership model that allows banks to customise and configure technology solutions for their client base — all without expensive upgrades or new service contracts. This is why I find cloud technology so invigorating. Its agile nature allows institutions to drive optimisation, embrace continuous innovation and stay one step ahead of the competition.
While the decision to close branches is often commercially focused, it is also crucial for banks to recognise the needs of their customers and the communities they serve. By making investments in technology, forming strategic partnerships with companies who understand and share their goals and embracing digital innovation, they will not only meet, but exceed their customers’ expectations, no matter how high they rise.
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
Metro Bank reduces BTL fixed rates
Metro Bank has announced it is cutting its fixed buy-to-let (BTL) interest rates by 0.2% for borrowers up to 70% LTV...
Metro Bank CEO to step down
Metro Bank has announced that Craig Donaldson (pictured above) — the bank’s CEO since 2009 — will step down at the end of the year...
Zopa Group announces £140m fundraise
Zopa has announced that it has raised £140m by signing its largest funding round to date...
PCF Bank targets £750m lending portfolio by September 2022
PCF Bank has revealed that it is aiming to achieve a £750m lending portfolio by September 2022...
Bank Leumi UK appoints Stephen Welch as senior relationship manager
Bank Leumi UK has announced the appointment of Stephen Welch (pictured above) to the hotel finance team as the new senior relationship manager...
Cambridge & Counties appoints relationship manager
Cambridge & Counties Bank has named Andrew Arnold as a relationship manager in its Cardiff-based property finance team...
Aldermore expands regional specialist finance team
Aldermore has strengthened its regional specialist finance presence with the appointments of Justin Nel (pictured above), as regional sales manager for the South East, and Jordan Bond, as regional sales manager for the South West...
An interview with Anand Subbaraman: Big tech companies edging into financial services will ‘take a chunk’ of the banking industry
In an interview with Specialist Banking, Anand Subbaraman, general manager of digital and retail banking products at Finastra (pictured above), discusses regulators’ attitude to cloud banking, and the prospect of challenger banks holding monopolistic power in the sector...
Recognise Financial Services makes two senior hires to executive team
Recognise Financial Services has appointed David Jenkins, as chief financial officer (pictured above), and Patrick Ferguson, as chief risk officer, to its executive team...
TSB sets out new growth strategy and puts focus on customers and competitiveness
TSB has unveiled a new growth strategy as it aims to focus on better serving customers and improving competitiveness...
nCino aims to partner with an additional ‘dozen’ European banks by end of January
nCino has revealed plans to partner with around a “dozen” European banks by the end of January as it puts a “concentrated focus” on larger banking markets in the continent...