If digital is at the core, when do you need to be physical?

Building on the last two blogs all companies, not just in finance, have been transformed through the connected, network economy. That was the last decade’s worth of digital transformation and has led analogue companies hoping that they are now digital natives, although many are digital immigrants, still with a log of their old analogue systems and processes in place.

Nevertheless, let’s give them the benefit of the doubt and say that, by 2025, most analogue organisations now have digital at the core. They have turned their business down in the last decade or more. They have ripped apart a lot of the focus of physical distribution with buildings and humans, and now have digital distribution with software and servers. Now it is time to consider what physical structure is needed on top of the digital core.

It used to be that the technologies were layers on the physical core to reduce the costs of physical distribution. Today, we have replaced that physical core with data analytics, apps and APIs, and we need to ask: what physical structures do we need to layer on top of that digital core to improve relationships and engagement.

Many are of the belief that physical branches and stores are now irrelevant, but that is too simplistic. Possibly the branch is no longer needed for transactions and retail services, but a lot of cash is still in the system – particularly for SMEs – and high net worth individuals still expect white glove treatment. Equally, corporates need access to banks for advice on trade and treasury services, foreign exchange and asset management, investment and insurances; as do high net worth individuals and retail customers.

So, the question is: where do you need physical engagement and in what form, layered on digital data services? Hopefully, many fintechs and financial institutions have answered that question by now, but this is where it gets interesting as we move into the third phase of radical change: intelligence.

If we could delegate all of our financial portfolio to a bot that trades, invests, transacts and manages on our behalf, when would we need a relationship manager in person? Some expect that they can always get human engagement and yet, if we can delegate all of our financial needs to Agentic AI bot-to-bot relationships, why would need such engagement? Purely to have a friendly face rather than being a faceless bank?

The intriguing thing here is that we will probably always need humans in the process, even though they are often the weakest link – most errors in processing occur when a human is involved – but where should those humans be based? In an office or a branch or working from home?

Think of a future vision where customer bots, whether retail or corporate, are dealing in real-time across all services and with their bank bots, and these bot-to-bot relationships are all delivered in visualisation tools as a holographic representation on a virtual screen triggered from your wearable devices. We are really close to this already when you think of augmented reality tools or AI glasses or watches that can trigger such virtual screens.

Then add to this that such real-time analytics and devices could connect you with a human anytime, anywhere, in a form that is Zoom 5.0. A form where humans look like humans.

The result would be: do we really need physical structures on our digital foundations? Have you worked that one out yet? I’m working on it.