As artificial intelligence increases in popularity, some in Fintech (financial technology and computer programs which assist banks and credit unions in processes) argue that banking will still utilize physical branches for transactions and other financial needs. While three out of five top executives in the banking industry are noting that branches may become less important than they once were, nearly nine in ten agree that branches offer value for their customers. Not everything will update to digital as quickly as you might assume, including this area of the financial industry.
Going Digital is Not the Highest Priority for All Banking Clients
When banking clients were asked whether they would switch to banking strictly online, the resulting answers may come as a surprise to you. In the World Branch Report, 40 percent of people interviewed said they want both online and physical branch banking options for keeping track of their financial obligations, whereas 20 percent said they would not switch to banking online only, and 29 percent prefer online only. These numbers have shown that digital-only banking and credit union options, though continually emerging, are not getting as much volume as they might have suspected.
As a Business, the Banking Industry Prefers to Keep Things Personal
Consumer involvement is critical in the banking industry, especially when it comes to the individuals we trust with our money. When banks consider brand development, the branch is the biggest key aspect of this. What incentives does the branch offer when customers enter their doors? When a consumer is looking for financial advice, retirement planning, mortgage assistance, and wealth management, a friendly face is going to do more to ease comfort level and trust, than reading an article or interacting with a chatbot online.
Banking and Credit Union Branches Offering More to Clients
To inspire traffic and usage of physical branches, banks and credit unions have been doing more for clients. From establishing events, incorporating breweries and coffee shops, to providing consumer workstations, branches are upping their appeal to those who may not frequently visit a branch. Additionally, banks and credit unions have been working to increase customer personalization as well as gathering data to learn about the habits of consumers at branches. One such method was implemented at a credit union when clients began to check-in upon arrival via a tablet, recording the reason for the visit. This gave the staff at the credit union an opportunity to gather information on the reasons clients came into the physical branches. When the staff at this credit union realized clients were most often coming in for notarization, management had more employees authorized to be notaries at the physical branch. This proves the point that although clients are conducing much of their banking online, there are still processes, such as notarization, which have not advanced to the digital world.
Cybersecurity Attacks Worry Consumers
In February 2016, cybersecurity officials were flabbergasted when an attack occurred on Bangladesh’s central bank, stealing nearly $100 million. After that, Russia faced a $31 million loss from its central and commercial banks. Noting the financial industry is striving to keep up with technological advancements, there still are attacks that catch governmental and private sector financial institutes by surprise. Measures such as two-factor authentication have proven to provide the best security for financial institutions, but many banks and credit unions have yet to implement these security measures. And although consumers are not directly affected by cyberattacks most of the time, the banks take hits, and business accounts suffer, as they have relatively few protections implemented. As cybersecurity continues to be updated and implemented, many consumers and businesses prefer utilizing branches to conduct their deposits and withdrawals, as the physical security measures offer peace of mind.
Consumers Prefer A Blend of Digital and Branch Banking
As mentioned above, digital-only banking has yet to take off entirely. Further data shows younger banking clients prefer a quality, personalized credit union and banking experience to one that can be transacted via an app. In fact, clients who were surveyed concerning their satisfaction levels of banking online versus banking at a physical location showed that those who banked only online were the least happy with their financial experiences. Though the number of clients using digital channels for banking continues to increase, nearly three-fourths of that population still prefer to couple their online banking with visits to the branch. Only the largest banking institutions reported high customer satisfaction with online only options, such as opening accounts online.
Security, Optimization, and Success with Southeastern Fintech Company
As the climate continues to shift in the physical branch and the online only debate continues, Ellsworth Systems understands the choice may be difficult on how to best prepare for this fluctuating environment. For branches, we know the need is there for continual modernization, as well as a client-personalized banking experience. The ESI Team pride ourselves on providing solutions in these instances to help. We offer products such as state-of-the-art Hyosung ATMs as well as secure, self-serve tellers, and many options in between. For digital banking, our innovation continues. We can install electronic as well as physical security for your institution’s well-being. Unsure of where to even begin to make these transitions and updates? We can offer customized branch design for your specific needs. Our entire sales and service team are waiting to hear how we can help make your credit union, business or bank more efficient, secure, and innovative.