Several banking experts feel what the banking industry had planned for say 5 years from now in terms of operations may have to be implemented just right now, for the pandemic has changed the way banking is done. For the moment it is an interregnum before banks wanting to survive would be required to get into action and put the new normal in practice. One indication of the things to come is the extent to which banking services could be delivered from anywhere even as the pandemic raged across the globe. Some U.S. banks have claimed that nearly 100% of their staff is working remotely and yet providing the services in the most effective manner. And these banks would prefer to continue doing so when the situation gets to normal. It is natural that banks would leverage the learnings from the current crisis to evolve a long-term strategy and identify the functions that can be delivered effectively from outside office premises.
One aspect that would be interesting to follow will be the shape that branch banking will take. It has been abundantly demonstrated during the pandemic that branches are almost irrelevant and at least retail banking could do without them operating fully.
Experiments in branchless banking, banks closing down branches for economy, the digital claiming space over the physical have all been indications that branches may soon become scarcer if not a matter of legacy.
Maybe when the virus is contained, there could be some increase in the footfall at the branches, but future branches may not retain the brick and mortar structure. At best, branches could be a destination only for detailed information and definitely not for transactions of any kind. It may gain the shape of a tech lobby where even complex issues of the customers, which hitherto used to be redressed by a human, will be handled by machines, physical interactions and customer care will be through digital terminals within private areas and humans will have the role of trouble-shooters. Such a structure will support customers anytime, anywhere. Besides, since customers could do most of the things digitally during the pandemic, there will be a rethink on their part on visiting branches post-pandemic.
This changes the role of customer-facing employees to that of focusing on more complex activities that require the added value of human intervention and get trained in new and complex skills as banking is tending to become more technology-oriented and complex.
Some experts even predict the evolution of ‘white label’ branches where, staff, space, technology and processes can be shared by various banks or even non-bank organizations, which can be a high-income generating model. Perhaps thinking aloud, these centers could well be community centers where there could be coffee shops, information hubs, and other activity generating points alongside bank branches. What is interesting is that technology to make such a concept a reality is already in existence.
When driverless cars can become a reality, why not branchless banks?
