Are Banking Branches On Their Way Out?
The banking industry faces challenges around staying innovative amidst slow growth within the industry. In fact some branches are closing due to the shift in mobile banking.
According to SNL Financial, roughly 1,407 branches closed in the U.S. last year because of a sharp decrease in customers.
The challenge for financial institutions is how to establish and market their unique selling propositions and customer value propositions as they serve different customer segments and their banking needs.
Having a clearly defined mobile strategy with a customer centric approach will be the key to the bank industry’s longevity and success.
Some interesting statistics on U.S. banks:
- In the last five years, Wells Fargo has gone from 0 to 14 million mobile customers. An estimated 35% of all US bank transactions are done via mobile.
- Research also shows that preference for making a deposit with a teller has dropped from 54 percent to 34 percent in 2014. Mobile deposit is attributed to the decrease in brand visits.
Some key trends within the financial industry includes marketing to the needs and preferences of Millenials, Baby Boomers and everyone in between.
- Video will be a huge part of banking and may even replace the teller experience. Forrester Research predicts the use of online video for both sales and service will increase significantly in 2015. Forrester also believes next year banks and credit unions will experiment more with other uses for video, such as video tellers in branches and using video banking to provide a human touch via remote touch points.
- Mobile payments will continue to grow, but banks must have solid data, analytics and infrastructure to efficiently manage and promote these services. According to the 2014 World Payments Report (WPR), m-payments are projected to grow at 60.8 percent in 2015.
- Beacon technology is being tested as part of creating a banking concierge experience once a customer enters the branch. Barclays in London launched a trial program in December 2014 using beacons to target customers with disabilities. The test sends a notification to bank employees via tablet whenever a customer with a disability enters the bank. One of the program goals is to inform customers with disabilities, prior to entering the branch, details on accessibility. By educating them before they come in, Barclays is hoping for a more positive experience and to effectively serve their needs.
Digital Disruptors To Watch
Some of the digital disruptors in the banking industry worth watching include Mitek supporting mobile payments and ZenBanx supporting multiple currencies with mobile payments options. The nations largest banks Citicorp and Bank of America are also worth watching. Apple recently signed on fifteen new financial institutions including ten credit unions with Apple Pay. To date, sixty participating banks and credit unions have signed on with Apple Pay in the last four months.
Sources: Bizjournals, pymnts.com, paymentweek.com, thefinancialbrand.com, americanbanker.com, warc.com, cutimes.com