Last year, the bank closed 2,300 branches.
This move is not surprising given the fact that banks, like other companies, are looking at their cost structures. At the same time, they have aggressively invested in technology and digital experiences, fending off challenges from neobanks and fintechs.
With its imposing Grecian columns and characteristic marble facade, the bank itself may look more like a museum than a financial center.
However, as Split CEO Nandan Sheth Observers writing the obituary for brick-and-mortar banking are being a little hasty, he told PYMNTS' Karen Webster.
Sheth said he has not operated the branch for personal use in the past year and a half, since he obtained notarized documents when Splitit went private several years ago. The CEO said one of his sons is banking with a neobank. Because his friend uses peer-to-peer payment services there, and the neobank also offers investment services. All of his son's financial needs are handled over the phone and through entirely digital channels.
Still, “I don't think this branch is dead,” he said, adding, “This branch will evolve and continues to evolve.”
He told Webster in the final installment of his “Next Steps in Payments” series, which attempts to answer the question “What is a bank?” And to delve into the changing nature of financial services, many companies are taking a cue from commerce giants and others to fine-tune their omnichannel offerings and leveraging the real estate they already have. I'm getting creative.
He recounted an example of a European bank allowing its branches to be used as co-working spaces. Customers come in, drink coffee, work, and complete banking transactions in a seamless workday environment.
“Since the pandemic, the classification of banks and the way we view banks has changed,” he said.
For those of us of a certain age, a bank may have been a place where you walked in, went to the teller, picked up your passbook, and stood in line whenever you needed to deposit or withdraw cash.
Brokerage firms operating within financial services have done a good job of connecting physical and digital activities in a frictionless way, Sheth said. It may serve as a guideline. He told Webster that on a recent occasion when he was considering a potential investment, he was able to schedule an appointment with an investment advisor the same day, and that an in-person presentation would take him 15 minutes. He said there wasn't.
“She showed everything on screen and I was happy with the experience because time is precious to all of us,” Sheth said.
This combination of customized experiences allows banks to become “magnets” for financial education, creating a never-ending journey for customers and customers, especially when complex and high-value transactions like mortgages are involved. , he said.
The four elements of modern banking
To get there, he said four elements of change are coming together to change the ways and means consumers want and want to engage with their banks.
We are all used to digital channels being our primary and most troublesome interaction points.
Asked by Webster if the U.S. is headed for the era of banking super apps, one digital front door that does it all, Sheth countered that consumers still want choice. said.
Banks have made strides in improving their digital operations, but they need to go even further, with simplicity as a guiding principle and links that instantly connect users to real banking experts to serve customers' needs. there is. He said advanced technologies, particularly artificial intelligence, are helping transform the delivery of banking itself by using customer data to form actionable insights.
The second factor is that the omnichannel experience required for a given transaction must be seamless so that consumers can start something in the digital world and stop the flow of documents and funds in a branch setting. That's true, he said.
The third element is one of personalization, which shapes everything from user experience preferences in banking apps to benefits tied to cards and investment advice, he said.
“Last but not least, the veil of security is also changing when we think about interactions with banks,” he said.
To speed up and improve banking itself, passwords need to be replaced with biometrics and AI.
“The use of digital channels within the banking system is increasing… but this means fraudsters are becoming more sophisticated in their attempts to obtain your accounts, data and personal information,” said Sheth. told Webster.
Passwords have proven to be very easy to steal and SMS codes can be intercepted, so AI and biometrics may prove to be a better line of defense.
The Greek Pillar will therefore still remain, but it will house a distinctly different range of experiences, informed and complemented by digital devices. Passbooks of the past will be replaced by a personalized omnichannel approach that customers value.
“The number of branches may decrease, but the specialty of the branch and the purpose, mission and vision of the branch will change,” Sheth said.
