The entire world seems eager to return to a sparkling vision of pre-2020 normalcy in which we travel, eat, and shop like we always have. However, some of the adjustments made during the global pandemic may prove to be long-term shifts in preference. Take digital banking, for instance.
Unlike other practices, people have not reverted back to their pre-pandemic habits in terms of banking. Consumers appear to prefer the freedom and convenience offered by digital banking. And, they’re likely to keep using it.
If that’s the case, how can traditional banks keep up? What can legacy institutions do to keep pace with digital-ready competitors?
The Digital Touch
Increased devotion to digitization is nearly ubiquitous.
To enter movie theaters, sporting events or concert halls, all one needs to do is present a digital ticket or QR code for entry. In restaurants and cafes, menus are scanned via smart phones rather than handed to customers for perusal. Digitization has also touched the ‘call-ahead’ seating feature, by allowing customers to buy and choose seating arrangements online.
Even the work we do reflects a definitive push toward the digital ecosystem. According to Forbes, 25% of all professional jobs in North America will be remote by the end of 2022. That’s a 15% leap year-over-year from 2019 to today.
Naturally, the way consumers save and spend money was sure to follow this trend. Digital banking is on the rise. There will be 196.8 million digital banking users in the US this year, making up 75.4% of the adult population, according to Business Insider.
This isn’t just a US-based phenomenon. As of January 2022, 27% of British adults have opened an account with a digital-only bank, equating to 14 million people. With an estimated 1.9 billion consumers using some form of online banking already, this figure is expected to jump to 2.5 billion by 2024.
Consumers prefer the convenience of mobile and online banking to the traditional banking model. Why wait in endless queues, struggle to find parking, or take time off during a busy workday to visit your bank, when you could merely make a few taps on your smartphone?
Banks that don’t yet offer digital banking solutions may soon find themselves outmoded. Additionally, strictly online banks like Aspiration and Chime offer high-interest savings accounts and other incentives traditional banks do not. This is bound to shake things up even further.
Customer Service in the Digital Age
Digitization can benefit banks as well as their customers. Digital options lower staffing costs and in-branch overhead. Rather than paying a in-person staff to engage in customer service, the same job can be managed digitally via a CSM or CRM service. Inbound messaging and phone calls can swiftly and effectively resolve customer issues in minutes.
Interactive tellers can resolve customer complaints and offer counseling and financial planning. They can
provide wealth management solutions without anyone ever needing to wait for an appointment or drive across town.
This multiplicity of digital banking options makes it rather difficult for modern consumers to return to the ‘old ways’, in which the onus to make contact and resolve issues required large chunks of time, effort, or active monitoring. All of this can be done from a mobile device at this stage, and this demand for convenience is universal.
In response, financial institutions (FIs) are working to improve their digital consumer experiences across the board by implementing and fine-tuning AI-driven response bots and assistants which aim to decrease wait times and further improve customer service.
Overall, machine learning patterns allow virtual assistants to self-improve at a rate that training modules for employees simply can’t match. AI-driven algorithms can teach themselves how best to respond to customer concerns in real time. The more the programs are used, the more they learn, which can better inform their human counterparts at the bank how best to proceed for a given topic.
While far from perfect, these AI-programs are self-improving. They might save billions for institutions as banking slides further into the digital ecosystem.
Flexibility and Efficiency are Required
As the digital landscape continues to expand, banks and financial institutions are scrambling to diversify as quickly as possible. If the above statistics are any indication, it’s clear to see why.
Consumers might want the option to walk into a shop, restaurant, or bank, but they no longer want to do so exclusively. Consumers expect their money, like so many other things in their lives now, to be at their fingertips at all times.
As technology advances past the pandemic and beyond, banks are well advised to take heed and supply these demands. Otherwise, emerging digital banks will take up that slack.