Is the way we bank changing? In a word, yes. Life and how we live it has been changing for years due to technology. When was the last time you hand-wrote a letter or, even visited your bank branch? With secure technology getting better every day, there’s rarely a time you need to go to a branch. You can do almost all of your banking online. What does this mean for the banks? Industry analysts forecast that in the next 10-20 years the majority of bank branches could close. Given that there are thousands of branches across the UK, a huge branch closure would change the banking landscape.
Some high street banks currently have anywhere from 1,000 to 2,500 branches across the country. Keeping only 500 of those branches open is a real possibility. Just look at some of the banks. Santander has acquired over 200,000 customers with just 1,000 branches. RBS Group has seen online and mobile transactions rise 232% in the last 3 years and branch visits to their approximately 2,000 outlets decline by 30%.
The ATM was the first technology that allowed customers to do simple transactions without stepping foot in the bank. Following that came telephone banking. That was an incredible technology that meant that not only did you not have to step foot in the bank, you didn’t need to leave the comfort of your home. That technology came to be in 1989 and only eight years later we were introduced to online banking. That’s a lot of innovation in a short period of time.
Banks have given us the ability to access our money any time of the day, every day. We can transfer money in real time and pay bills at a time that’s convenient to us. What’s missing from this equation is the customer experience that most of us care about. It was nice to go into our branch and be greeted by smiling faces that actually knew our name. Even better was the access to experts for advice on anything from investments to loans and mortgages. Where are those needs met in an online world? If banks close the majority of their branches, are you willing to travel a distance to be able to speak to someone at a branch, in person?
Closing branches saves the banks millions of dollars but those closings come with a different cost – customer loyalty. Brand experience needs to be thought out very carefully by banks transitioning away from bricks and mortar branches to online banking. It’s got to be about personal engagement and a human level of interaction. Banks have already fallen short of customer expectations with their telephone systems. How many times have you had to listen to a steady stream of ‘options’ to choose from when calling your bank, and when you finally reach an actual human they have to transfer you to someone else and then you reach their voicemail. Not a good experience and not a good way to garner brand loyalty.
In this globally-connect world of technology, there seems to be something that has to be given up to gain the autonomy that this technology allows us. It doesn’t have to be that way, though. We, after all, are customers of our banks and can and should dictate the level of customer service and experience we get from the banks. It’s easy not to think about this aspect when you’re just doing regular banking online but when you get into more sophisticated banking, such as needing a mortgage or advice on investments, you’ll want a bank that can deliver, in person, expert advice.