After decades, even generations, of centering the business of personal banking around the physical location, the times they are a changin’. Drive-up tellers, ATMs, phone banking – even early online and mobile apps – were all positioned around the branch. Processes and progress flowed from the branch out.
Convenience has always been the driving factor in choosing a financial institution, originally defined around your proximity to branch locations. The easier it was for you to make your monthly, weekly, or even daily visit to the easiest-to-access bank branch heavily dictated which financial institution you were most likely to trust with your money. Today, convenience has shifted to mobile.
This means two things:
1. Branches will evolve.
Not only will face-to-face customer interactions shrink but when they do happen, they will be for increasingly complex reasons. This complexity will in turn mean that although branch visits are less often, these connections will be even more influential in building a human relationship with customers.
Financial institutions will need to evolve their branches in order to enhance their value propositions through connections that can’t happen digitally. Likely this will mean a smaller retail footprint with a focus on providing financial advice. Tellers may come out from behind the walk-up counter to interact with customers, point them in the right direction for help (and therefore, prevent the dreaded line waiting), or even solve their needs directly.
2. Mobile banking will become the new center of banking.
Branch-centric factors are far less important today as they were just a few years ago. Smartphone use continues to grow year over year and through 2017, indicators point mobile application use and conversions surpassed that of desktop applications. This means consumers are in fact interested in “buying” no just “browsing”.
To capitalize on this, financial institutions will continue to improve mobile application design taking advantage of time saving features like pre-fill of identity information from the mobile carrier or from a photo of the consumer’s driver’s license, reducing friction as well as improving the onboarding experience. Moving beyond 2018, personal banking will not only start with, but be centered around mobile banking first, then roll out to other online, call center, physical locations, and institution-specific apps.