This is the last of a series of blogs about social finance that has covered new entrants to banking, their barriers to
entry, how they might disrupt banks, social technologies and more. If
you missed the earlier entries, here they are:
In this final blog, I thought we would look at the likely picture of
the future retail bank, as a result of all of the above.
It’s probably easiest to pick on each of a banks’ key
channels of distribution to do this.
The future bank will still have branches but about a tenth or less of
the number of branches they have today.
We all think firms that can distribute electronically – such as
book stores, music, travel and related markets – can shut down
shops and just deliver through a website.
Although there are still many thriving book, music and travel firms out
there with high street retail stores.
Even if this were true however, a bank still needs branches.
Humans just don’t trust something they cannot touch with their
money you see.
After all, where would all the crowds have gone when Northern Rock
imploded if they were just an internet site?
The biggest issue with the idea of a branchless bank is how to deal
with people worried about their money who need advice and support.
That’s why banks will continue to need branches … and to sell
That’s why even the branchless banks– ING Direct, First
Direct, etc –are backed by banks with branches.
So the idea of a completely branchless bank is a fallacy.
But the fact that banks have legacy branches transacting and
administering cheques and cash payments is a costly overhead and a
burden that needs to be shed.
Therefore, over the next decade, many banks will get rid of 90% of
their branch network, consolidating into mega sales branches in major
town centres, and leaving the rest as satellite hubs with multifunction ATMs.
Today’s call centre was built for audio telephone calls from
25 years ago, great idea.
Today, not such a good idea as we now have multifunction telephones
that are mobile.
Equally, we have chatrooms, instant messaging, text messaging and
email, all of which has been thrown into the call centre operations as
they migrated to become contact centres.
What a muddle though, as call centres struggle to keep up with the
volume of calls and most of it is outsourced to some country thousands
of miles away.
Tomorrow’s call centre will be very different.
It will be rebuilt for intuitive communication between humans visually.
As the internet and mobile networks become video-enabled, call centres
will be responding to customers with avatars, humans on video cameras,
voice and gesture driven interfaces with shared screen access and more.
Therefore, give it about ten years, and the nine out of ten branches
that closed down will have their staff sitting at home in domestic video
hubs for servicing customers.
Did I say ‘domestic video hubs’? Sure.
Why a call centre is thought to need to be based in some big office
somewhere is also a fallacy.
Like the branch and call centre, internet banking is already outdated
and out of style as mobile banking takes over.
As a result, internet banking is straining at the leash for renewal and re-energising.
Surprisingly, in 2009, most banks have internet banking built for about 2000.
Their sites offer self-service systems which pretty much emulate the
dull transactional bank statements of last century’s systems, and
the rest is just advertising.
What’s lacking is interaction.
Interactive online banking with humans that is, not with data.
A multimedia rich internet experience is what we are building today,
with the transactional and data forms of banking enriched with
advertising, dialogue, debate and human conversations.
This is why blogging and social networking adds such a rich canvas to
the electronic bank experience.
Suddenly, a bank statement comes alive with potential sales and
cross-selling opportunities as bankers realise that the client’s
online interactions are just as important as a human face-to-face
transaction for sales, advise, support and retention.
In 2009, we have all got excited about mobile banking but, by 2020,
everyone will find that the mobile is just an access device to a
standardised and rationalised electronic platform for distributing and
supporting banking experiences.
The mobile will access the same platform as the consumer’s
television or other electronic devices.
As the iPod iPood into nostalgia, the most likely mobile access device
will be either embedded in clothing or skin, or a watch style device
that provides a complete experience for interacting on the move.
These devices will ink to visual displays that pop up as 20-inch
projected screens on demand.
In other words, your mobile device is now tiny, transparent, voice and
gesture driven and as multimedia rich as carrying around a 20-inch TV
fully broadband enabled.
Wow! What will a bank do with that opportunity? Hopefully, proximity
based and location based sales and advisory support.
In other words, as you walk past a real estate broker’s office,
you get a mortgage advert; as you drive past the Porsche showroom, you
get a car loan prompt; as you wake up in the morning, you get a reminder
that you need to transfer funds today to avoid charges; and so on.
In fact, the bank has moved from being a reactive drone to being a
proactive service agent, delivering exceptional service at every
opportunity based upon digital connections that create human experiences.
Sounds like a load of management and futurist baloney?
Possibly. Except it’s right here, right now.
Right here, right now
You think I’m talking 2020?
I’m talking right here, right now.
Right here, right now, I have web services and mobile services that
manage my life for me. Alerts, alarms, auto top-ups, widgets and google
gadgets, rss feeds, tweets … all of these are creating a digitally
enhanced lifestyle where I have total control and total knowledge if
and when I want it.
And that’s where my future bank life will be.
Total control over my finances based upon the permissions and program
of menu choices made upon account opening and controlled in real-time
interactively anytime through my digital connections.
Human experiences through digital connections.
That’s the future bank.