Banking is one of the many aspects of life that is becoming almost unrecognizable with changes in technology. With mobile banking and 24-hour a day access to your financial information, many of the functions of your local bank branch are becoming obsolete. The banking industry has to work to keep up with new demands, and that means how we bank will be changing. Here are four ways that banks will adapt to keep up with changing customer needs:
1. The end of banker’s hours. Anyone who has ever rushed to their local bank branch just before 5:00 p.m. on a weekday has known the frustration of trying to handle finances within the narrow window of banking hours. But in a 24/7 world, only being open from 9:00-5:00 Monday through Friday is a quick way to lose customers. Banks are finding multiple solutions to this. Some like Columbus, Ohio’s Cooper State Bank, are offering their 7-day-a-week hours as an alternative to the usual inconvenience of banker’s hours. Others, like banking giant CitiBank, are using technology to connect customers to bankers via touch screens in their “bank of the future” branches. Customers can video chat with a remote banker 24 hours a day in this tech-savvy branch.
No matter how banks choose to deal with this situation, it will likely result in more convenience for us.
2. Banking as part of the community. Many banks are finding that having a separate brick-and-mortar store is difficult to maintain. Going to the bank is not necessarily a separate errand that modern consumers are likely to accept. We’ve all seen the rise of bank branches in grocery stores, which is a smart move on the part of the banks. Customers are more likely to make it into a branch if it’s conveniently located where they’re already doing their shopping.
But that is not the only innovation that banks are using to bring in customers. Oregon’s Umpqua Holdings Corporation has started treating their banks more like community centers. Community members will come to their branches for wine tastings, fitness classes, readings, and demonstrations — and stay to discuss their mortgage.
3. More virtual banks. More and more modern customers are willing to forego the branch experience entirely, and do all of their banking online. Not only do internet-only banks have lower overhead — and pass the savings on to their customers— but they also allow you the convenience of banking any time you like. The biggest obstacle to the internet-only banking industry is the customers’ perpetual fear of security. As security technology adapts, and as the Facebook generation — which is very comfortable online — grows to adulthood, we’re likely to see more and more internet-only banks offering their services like online savings accounts.
4. A change in products offered/advertised. Our population is aging. Baby Boomers are entering retirement, which means that their banking needs are changing. Instead of needing mortgages and investment accounts, this large population of seniors is going to need products like annuities and structured income contracts. While banks will certainly continue to offer the sorts of products and services that young customers need, we’re likely to see a change in the focus of banks in order to accommodate the large number of retirees who will need different services as they live out their golden years. This is one area of banking that will focus on the needs of the older population, rather than on the technological and other preferences of the younger generations.
The Bottom Line
Banking is a service-oriented industry, and the banks have better change in order to “service” us better. Otherwise, there will be new innovation that will take their business away.