Today, banking environment has translated into an open virtual landscape. This banking environment comprises artificial intelligence (AI), voice interfaces, cloud technology and many more new technologies. The entire banking system has transformed from central operations to client service operations. Essentially, Virtual banking minimizes paper work through ATMs, server racks etc. Infact, in the current scenario, we do not need to personally visit the bank for banking operations. Devices i.e. laptops, smart-phones help us to connect with bank portal for banking operations.
Virtual banking results in reduction of bank branches. According to a survey in India, 51% of people use online banking. Globally it is 66%. As per Eurostat data, 59% of Europeans use online banking. At the same time, people are more concern about network security. They expect a secure, fast, less expensive and user-friendly operating platform.
FUTURE BANK BRANCH
As we can see, people are adopting virtual banking. The future bank branches have to be reshaped with respect to the branch environment. There are two options for banks that is either to close or to modify the current structure. Some banks have begun to consider this issue and have applied innovative trends to make branches as community centres.
Umpqua Bank of Oregon-Enhanced consumer interaction with the introduction of yoga classes, conference rooms, internet facilities (wi-fi), coffee, snacks etc. According to them, this will help to attract customers and build trust between existing and prospective customers. According to Eve Callahan, executive vice president of Umpqua, this approach will promote customer interaction as it will encourage them to discuss about their finances, life moments, and money matters in a friendly environment, such as while doing yoga / conferences, etc. This will help to break bricks and mortar environment. With this innovative structure, this will ensure, banking experience more approachable, engaging and fun.
Changes in customer behavior have forced banks to look more closely at their bank branches. According to a recent study, it was found that between January 2015 and December 2019, nearly 3,400 bank branches in the UK were closed.
Virgin Money- A British Banking and Financial service brand innovated its branch into a community centre called "The Money Lounge" with a bowling alley, pool table and other facilities for children. They want their existing and prospective customers should relax, unwind and make critical financial decisions without any stress. Many of its branches provide venues to entrepreneurs for events and concerts. They have created dedicated area, where people can operate their online banking operations and also provide the services of their company - Virgin products. The lounge offers financial products to the customers according to their financial profile.
In December 2019, Scottish Bank remodelled their flagship branch in Glasgow. This branch offers in-house cafes, free event programs on various topics including home purchases, interior design, small business management, digital skills training etc. According to Tora Foley, Managing Director of the Bank of Scotland, banks can offer a variety of services in a trusted environment that combines with digital technology and professional expertise.
Despite the growth of virtual banking, people still want a personal touch in banking operations. According to a recent study by consumer group mentioned that 8.4 million British adults (17%) prefer to visit personally in the bank branch for their banking activities. About 7 out of 10 customers use a mix of banking services (digital and traditional).
Hence the banking heads are of the opinion that bank branches will remain there as one of the platforms for facilitation such as advice and learning. Bankers need to rethink and rebuild the bank branch model to be more productive in today's virtual banking landscape which is build with digital bricks and mortar.