Joel Plotkin/Bank of America/Joel Plotkin
According to a recent survey by GOBankingRates, more than one in four people – 27% – do their banking entirely online. This includes 31% of 25-34 year olds.
While it’s no surprise that almost a third of youngest adults have given up on physical branches altogether, most people probably wouldn’t guess that 35-44 year olds were even more likely to do the same. thing. , but it’s true. 36% of respondents in this demographic now do all their banking online.
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So what does it mean for the future of banking when a quarter of America – including a full third of middle-aged and younger people – has left the traditional branch behind? GOBankingRates asked the experts to look at the future of banking.
As chief product officer for Chase, Rohan Amin has a better window into the future of the bank than anyone. He leads the company’s product, design, customer experience, data and analytics teams and leads the digital division, including Chase Online and the Chase mobile app for the nearly 59 million customers digitally. bank assets.
In his mind, the future belongs to technology that makes people better money managers.
“Consumers and small business owners expect their banks to go beyond traditional account offerings and provide trusted tools and resources to help them understand and improve their financial health,” said Amin. . “This includes giving them lightning-fast insight into where their money is and how it’s being used, available at their fingertips. Actions such as depositing checks, sending money, investing, exploring mortgage refinancing options, and managing car payments are all things consumers want to do from their phones.
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“Consumer demand for digital features that make it easier to manage their financial lives is driving innovation from fintech startups with a few thousand users to banks like Chase that serve more than 60 million households.”
But today’s banking apps can do most of what Amin just described – so what does the future hold?
“Consumers and small business owners will demand more personalization, leading to hyper-personalized features that deliver tailored experiences based on real-time dynamic signals about each customer’s individual needs and profile,” said Amin. .
The digital designers of tomorrow will develop a concept that we already know today: aesthetics matter.
“Beautiful, functional and intentional design has become increasingly important to consumers as they embrace digital platforms to manage even more aspects of their personal and professional lives, from streaming entertainment and shopping to creating. small businesses and managing budgets,” said Amin. “Today, it’s critical for businesses to design experiences that help customers solve their problems and get the most out of their lives with clarity and confidence, especially in a market crowded with alternatives.
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“Just as technology has helped improve the customer experience across all industries, including banking, the race for better design is helping to make digital banking easier to use and more engaging.”
Academic discussions of the future of banking tend to focus on whether apps will replace branches, but that doesn’t seem like a choice real people want to make in real life.
“Technology will continue to bridge the gap between physical and digital experiences,” Amin said. “What we have seen throughout the pandemic is that while our clients are engaging with us more digitally than ever before, they have continued to rely on personal relationships with their bankers and advisors.
“But many consumers and small business owners also want to do things on their own, which is why self-service options will continue to evolve, giving customers the ability to achieve their goals with confidence using their mobile app, if they don’t want to speak to a customer service specialist.
“When they want to speak to an employee,” he added, “these customer service specialists will also benefit from more technology to help them further improve the customer experience over the phone. Artificial intelligence, machine learning and voice biometrics will play an even greater role in helping specialists quickly authenticate a customer and answer their questions faster and more efficiently.
The clearing delays, pending transactions and waiting periods that continue to frustrate so many banking customers today will almost certainly not exist by the end of the decade. This is because banks that don’t know how to get rid of it will get rid of themselves.
“When it comes to getting paid, speed and accuracy are of the utmost importance,” Amin said. “People working in the gig economy, for example, may want to be paid at the end of their shift, and employers are able to meet those needs by sending the funds through a real-time payment network. directly to their bank account.
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Amin highlighted his own company’s request for payment (RFP) service.
“It’s not just businesses that benefit from this service,” Amin said. “Consumers will also be able to receive their invoices as RFPs directly in their bank’s app or website and authorize their bank to pay them instantly, including on weekends or holidays.”
Most bank customers never have to set foot in a branch if they don’t want to, but the concept of banks as physical spaces with safes and desks and people sucks share – although it has changed for some time while.
“Big banks were always reducing their physical outlets to focus on ATMs and mobile banking,” said Brian Penny, former chief operating officer and business analyst at Bank of America. “The pandemic has only accelerated the situation.”
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A hybrid model that has been emerging for years continues to evolve.
“As with retail, we will likely see a continued shift to a digital-first experience with physical banking focused on more complex financial services and relationship management,” said Henry Barclay, co-founder of the financial management platform for the gig economy. Pallo. “Apple, for example, generates a large majority of its revenue in digital format, but leverages its physical stores to connect with customers and allow them to enter, see, touch and understand products by speaking with representatives.
“This shift is already underway in the banking industry, with most teller responsibilities taken over by ATMs and smartphones, and will likely continue to accelerate with smarter digital experiences supporting banks’ management of their customer relationships.
Branches aren’t going anywhere – at least not yet – and neither is the concept of banking as we know it.
“No matter how many Stripes and Blocks and PayPals and Bitcoins are invented, the banking system isn’t going anywhere,” Penny said. “It was proven in 2008 that it was too big to fail.”
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