Essential elements of a branchless bank

Digital transformation Banking
Elements of a digital bank
Even before COVID-19 relegated us to our couches, digital banking was on the rise. But it was only at the height of the pandemic, when we had no other choice, that more of us started turning to digital-only channels, putting pressure on banks and other institutions to fast-track their pre-COVID digital strategies.

Now that the worst is over (we hope!) and branches have slowly started re-opening their doors, what will the “new normal” in banking look like? Will branches eventually return to their former glory? Or will those who have come to know and enjoy the safety and convenience of digital banking stay converted, forcing banks to re-think their options? 
Some experts claim that the bank branch is dead. Others maintain that a brick-and-mortar presence is still necessary, albeit with a different role to play. So, while we can’t predict with certainty what banking will look like as we emerge from the pandemic, we can be sure it won’t be the same.

Planning for a branchless future?

The main purpose of the bank branch is – and always was – to create a trusted environment where customers can engage with bank employees, and vice versa. Today’s technology, however, means that these interactions can happen without everyone in the same room. Would it then be a far stretch to imagine branchless banking as the future of banking? And, if so, what would the key components of a branchless, digital-only bank be?

1. A core platform

The foundation of any digital bank is trust, which can only be achieved with a robust banking platform. The platform should provide a highly secure environment from which core banking, payments, card management, and authentication, for example, could be seamlessly connected. Having a flexible platform like this would enable the rapid implementation of digital innovations – and new updates – all while providing a streamlined digital customer experience.

2. Ease of use

Good user experience is a must. One way a bank is measured on this is how easy it is for a consumer to open an account. A recent survey by Built for Mars showed that digital-only banks make account opening much easier than traditional banks. Going forward, consumers should be able to open an account from their mobile banking apps using digital identity verification to secure and streamline the process, minimizing the number of clicks and the amount of data required.

3. Integrated channels

Our digital lives have expanded, giving consumers the freedom to choose how they want to interact with their service providers. What’s not negotiable is that these interactions need to be frictionless and personalized. Having multiple channels through which to bank is not a new concept, but a true omnichannel banking experience is about more than the mere provision of those channels. “It’s about a thoughtfully designed, seamless and consistent interaction between customers and their financial institutions across multiple channels, with each channel complementing the others,” says Entersekt’s Frans Labuschagne.

4. Personalized advice and assistance

In the time before COVID, customers could walk into their branches and have someone help them, in person, choose the right financial products for their needs. This went a long way to generate loyalty for, and confidence in, the bank. A branchless bank needs to replicate this experience with each interaction if it wants to build good customer relationships. With advances in technology and access to greater amounts of data, banks can achieve this by engaging proactively and in real-time with their customers. 

5. Face-to-face alternatives

Financial professionals that believe branches are here to stay say that older generations prefer to talk to a real person. In fact, 42% of all age groups in the UK would feel better if they could do this. One of the challenges for branchless banks would be how to provide that personal touch. Call centers are an obvious choice but, as they stand today, involve menus to navigate, buttons to press, frustrating authentication processes, and long waiting times. What if a customer could contact a call center through their mobile banking app and enjoy the same personalized experience they would normally receive at a branch? 

6. Reliable security

Critical to making any of this possible is, of course, security; often a complex undertaking in the digital space when trying to combine it with simple and intuitive experiences across multiple banking channels. The ideal would be low-friction login and step-up authentication that offer consistent experiences regardless of the channel in use. In a world where our digital footprint is ever-expanding, a strong digital ID is critical to accurately identify and authenticate users to guard against digital banking and payments fraud.
The longer this crisis continues, the more likely it will be that the migration to digital will become permanent. So, even if the future of banking isn’t branchless, can you afford to ignore the clear shift in consumer behavior?

Contact us if you’d like to learn more about our customer-centric digital solutions that can help you deliver intuitive, low-friction experiences that drive loyalty.