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You need to add physical to digital, not vice versa

I had a long drive last week and noticed five or six massive warehouses by the side of the motorway. It made me reflect on a new warehouse world. I’ve already lamented the loss of main street stores and likely end of malls but, equally, it’s interesting to consider this shift from main street to warehouse.

Societies are now digital societies. They socialise online, they shop online, they bank online. The result is that huge swathes of land are becoming deserted and replace by huge monoliths of storage.

The warehouse replaces main street.

The real thing around this is that the home is now connected to everything, and no-one needs to go anywhere. Or does it? Sure, we can have logistics and deliveries, everything we need in warehouses and placed in bags and boxes to ship to our homes, but do we need no connections? The more we become connected, are we becoming more disconnected?

I ponder these things purely due to the fact that yes, digital makes life so much easier and better, but it needs balance. For example, why do I think bank branches will always be here? Sure, we can get rid of bank branches, but the ability to make a physical connection is often required to augment the digital connection. The thing is: why is it required?




… for trust.

This is why, when we see this massive shift from main street to warehouse, banks need to think about how their business is shifting from main street to app. My contention – and it has been for a long time – is that you can decimate and close branches, but remember that there is still a need for human contact.

Sure, digital-first banks can work with zero distribution … but are they trusted?

When push comes to shove, will a digital-only bank keep customers who need reassurances from humans?

If a digital-first bank only has digital, will it succeed?

Some may say: but we have a call centre? That’s fine, but a call centre is not the same as a face-to-face dialogue … for trust.

What this means is that when designing a digital bank, we should start with designing the interaction and processes we want to provide customers. Some digital banks will claim they only want to be digital: that defines and limits their customer engagement and audience; some digital banks are saying they are digital-first but yes, you can talk to our call centre: that defines and limits their customer engagement and audience; and some digital banks are saying they are digital-first, have a call centre, genius bar and a small number of physical interaction areas: that defines and limits their customer engagement and audience.

Thing is, are digital banks doing this by design or osmosis? On the converse, are traditional banks doing this by design or by osmosis?

My contention is that you need to start with the data, the customer journey and user experience, the way in which you want to engage and the things you are trying to provide. Then, and only then, work out if any human interaction is required and, if so, where, when and how.

It’s the old rant: traditional banks are adding digital to their physical structures. What we need to do is work out why, where, when and how to add physical structures to our digital foundations.

About Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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