Martin Frascaroli

CEO and Founder at Aivo

How Does the Bank of the Future Work?

Gone are the days when banking services were standardised and restrictive. Evolving digital technologies, shifting consumer preferences and increasing competition are creating new challenges for banks. 
Us, consumers, are now used to convenient, high-functioning digital tools in all areas of our lives. Today, we use a wide variety of channels to communicate with brands. We use on-demand apps, platforms and websites of all types to meditate, exercise, entertain ourselves and even track our sleep on a daily basis. And we demand the same flexibility and ease-of-use when we bank and make payments.
As a result, most banks have moved head-on with digitization as a strategy to compete with challenger banks and disruptive fintechs, and secure customer loyalty. Yet, today, many of their digital solutions are still disappointing in terms of how they translate banking tasks and experiences. In fact, according to a Bain & Company study, “banking apps and websites often fall short of being convenient, multi-functional, and easy to use. Fewer than half of UK respondents said their bank’s website lets them do everything they need, or is easy to use. The share is even lower for banks’ mobile apps. 
Truth is, there’s more aspects to consider when providing a comprehensive experience than just a digital-first approach. Success now depends on keeping all focus firmly on the consumer and adding real value to each and every interaction. There is a need to balance meeting traditional customers’ needs with the added value new trends and tech innovation can add to improve processes and experiences. 
So, how will the bank of the future look like? What trends and changes are shaping the way we will manage our finances in the future?

Banking with our voices

So far, banks have barely touched some technologies that have already become very strong in consumer markets, such as voice-assistants. Today, many consumers (25% of US consumers, according to Bain & Company) are using tools like Siri, Alexa or Google Assistant on their smartphones or Alexa or Google Home at home (almost one-fifth). 
Many banks have put the technology in their innovation pipeline, but to date only a few banks, such as Santander UK, Capital One and USAA, are actually using it in the market. Which is surprising since almost 25% of consumers in Australia, the UK and the US said they are open to trying the technology for their banking in the future. A few years from now, this trend will definitely be tapped.

Chatbots become real financial advisors and experiences more personalised

Advances in machine learning and artificial intelligence (AI), have allowed more and more banking organizations to launch AI chatbot solutions, reducing costs and serving increasingly tech-savvy consumers. This technology has facilitated two-way communication, and in many instances, even replaced channels such as phone, email or text, allowing customers to ask questions or request services using natural language.
As a result, the last couple of years has seen an increase in the number of banks adopting automated conversational agents. “3 out of 4 financial institutions view chatbots as a lucrative investment opportunity”, revealed an industry survey. 
Today, this technology is mainly used to provide customers with quick service and transactional support, handling tasks such as balance inquiries, bank account details, loan queries etc., freeing customer service representatives’ time for complex issues. But there is still room for growth within their capabilities.
As AI keeps on developing, chatbots are transforming from customer service support and information base tools into real financial advisors. Integrated with the right historical data, predictive behaviour software, and other intelligent analysis platforms, chatbots will understand the spending habits, create tailored financial tips for customers and help them manage and save money.

Branches will take on new roles, combining digital and physical services

I am not one to believe that bank branches will go extinct. Banking customers are not yet ready to forgo the branch. In fact, easy access to a branch was the third biggest driver of customer loyalty for banks, according to a recent Accenture study. But as more bank services migrate online, customers are looking for a branch experience that blends the physical and digital in a seamless manner, especially when serving different age groups. 
As we mentioned before, automated advice on banking services is becoming pervasive but it hasn’t and won’t replace human advice completely. Daily transactions and banking operations such as transfers, deposits and account openings will be moving more and more to digital. Whereas branches will become the destination for complex advice and problem resolution only. 
Despite customers’ stated interest in seeing more automated support, the ability to make a complaint (67%) or seek advice about complex products such as mortgages (61%) with a human advisor is seen as the most important features of branches in the future. 
Many banks have already developed different types of branches, some ATM-only, others highly tech-enabled hubs with very cool digital integrations and even others with a few or even no tellers. We will see branches transforming to play different roles. 

Consumers will define the experience

We perform a wide array of banking tasks and transactions, from routine bill payment to resolving a stolen credit card, and these different types of episodes require different management strategies. At the same time, not two customers are the same and they shouldn’t be treated as such. 
In the next few years, yes, we will see banks continuing down the digital road, making routine interactions easy and convenient, and improving the service experience of high-stakes and more complex episodes.
When there is a chance for automation and self-service, banks will take it. Because, truth is, we don’t want to lose our time either. We will see banks nudging us to go digital, to try self-service, but we will also see them improving integrations with other types of customer service, such as phone, messaging, face-to-face, and developing a more omnichannel approach to banking, granting us options. 
After all, adopting a flexible and agile system is crucial to create value for customers. And embracing the innovations technology allows is the only way to become an intelligent and competitive bank of tomorrow.

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