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
N26 introduces MoneyBeam to UK users
N26 has introduced MoneyBeam to its UK users which will enable them to instantly send money to other users of the mobile bank...
NatWest names new CEO for Mettle
NatWest has named Marieke Flament (pictured above) as the CEO of its SME digital banking subsidiary Mettle...
CYBG to rebrand as Virgin Money and launch a new business current account
CYBG has revealed that it will rebrand to Virgin Money over the next two years with new Virgin Money-branded products...
New bank Chetwood Financial reveals long-term ambitions
Chetwood Financial is aiming to use technology to offer better deals to customers, having secured a banking licence late last year...
The opportunity for accountants to help businesses
In light of bank and building society branch closures, a new report published by Oxford Economics in partnership with Funding Circle has revealed that in the UK — despite the vast economic output generated by SMEs — small business lending accounts for only 2% of banks’ balance sheets...
Paragon Bank’s structured lending team passes £100m milestone
Paragon Bank’s structured lending team has passed its £100m milestone 18 months after launching...
Hanley Economic expands intermediary support team
Hanley Economic Building Society has appointed Kate McKeon (pictured above) as an intermediary sales assistant...
Gatehouse Bank names new direct adviser
Gatehouse Bank has appointed Robert Siddall (pictured above) as a direct adviser...
British Business Bank increases facility with Simply to £180m
Non-bank lender Simply has received a third facility of £60m from the British Business Bank under the latter’s ENABLE funding programme...
OakNorth provides facility for cloud platform provider acquisition
OakNorth has provided a loan to managed service and cloud platform provider Oncore IT for the acquisition of Fuse Technologies...
Monzo to launch first USA accounts this summer
Monzo has announced it will be launching its first accounts in the USA this summer...