Some Reflections on Our 2020 Banking Predictions
Where were we?
Looking back on our predictions for banks from the start of the year, it’s fair to say no one could have known how the year would turn out and how big the impact of the coronavirus pandemic would have on the banking industry.
Having said that, our expectations about the key trends of the year have largely rung true.
Bank Branches Remain a Necessity with a Focus on Video Conferencing
We predicted that bank branches would continue to have a key role in society in 2020.
Indeed, in the UK, bank branches were put on the exemption list during lockdown allowing them to legally stay open, and banks remained open as much as possible. However, as lockdown restrictions began lifting, financial institutions that had put a pause on previously planned closures started shutting branches again, such as Co-op Bank as iNews reported in September.
The same news story noted how YouGov research by Metro Bank found many people are disappointed by physical touchpoints disappearing – more than 25% said they are struggling to do their banking due to branch closures and over 50% said they like to speak to bank staff in person.
Unfortunately, this trend is likely to continue – RBR’s Teller Automation and Branch Transformation 2019 report predicts 1,160 branches will close by 2023 in the UK.
We also expected video conferencing and remote assistance to grow in use and be a remedy to this trend, satisfying digital natives’ demand for digital forms of communication with their financial providers and helping older generations and those in remote areas to be able to access services more easily.
As discussed in our January blog post, there is a way to keep offering digital channels while also keeping branches open, allowing banks to provide maximum choice to their customers over however they want to engage.
Banks can transform their existing sites into #NextGenBranches – the next generation bank branches that follow a ‘lean bank branch’ model that maximises efficiency and profitability, enabling them to remain open.
These branches are fully digital, multifunctional and customer-oriented, leveraging technologies such as video banking, AI and automation to deliver 24/7 access to banking services.
Read more about how banks can realise the #NextGenBranch here
Leveraging AI to Gain Customer Insights
Another 2020 banking prediction we made was that traditional banks would need to be able to understand, manage, and integrate AI throughout its infrastructure to remain competitive.
While COVID-19 threw a spanner in the works of every organisations’ digital transformation plans for 2020, one thing that has been clear throughout the pandemic is the importance of listening to and supporting customers during crises periods.
Auriga’s Bank4Me solution allows banks to better understand customer needs by digitally connecting them via audio and video banking channels at branches real time. This solution can prove invaluable in such times of unprecedented change.
Financial institutions that use data-driven technology platforms can significantly improve user experience, satisfaction and sales.
Auriga’s NextGenBranch uses artificial intelligence in order to deliver personalised customer journeys, taking note of what activity the customer wants to achieve and providing relevant, informative and useful communications to help them do so.
Machine learning algorithms analyse key historical trends on banks’ customer base and predictive analysis can forecast operations, detect fraud, improve risk management and deliver predictive maintenance for hardware to maximise profitability and ensure maximum banking infrastructure uptime.
ATMs: Cloud and Security are the key
ATMs exploiting cloud technology could be a seamless part of an omnichannel strategy.
Cloud-based architecture makes managing ATM networks significantly more cost effective and productive. It offers the capability and resources to quickly update ATMs centrally, which allows new services and interface alterations to be rolled out quickly and effectively.
Running cloud-based ATM software is likely to trigger much faster innovation by offering faster time-to-market for promoting new services and functionalities to customers and prospects.
Understandably, given the data and currency held in ATMs, as well as the access they provide as endpoints to the rest of a bank’s network, the security of customer channels is a vital consideration for the banking sector.
ATM vulnerabilities typically come from a malicious end user with access to the machine itself, which is the tactic used in the majority of successful attacks.
ATM software suppliers who are approaching this topic with banks must have a proper plan in place to manage security concerns.
Encryption, masking and whitelisting are all available in a cloud-based approach to manage ATM security and prevent attacks on the endpoint.
Time will tell how well banking can bounce back from the events of 2020 so far, but what is certain is that technology will be vital to helping our industry recover. Stay tuned for our banking predictions for the industry in 2021!