Digital is transforming everything. But, its effect on banking is truly transformative. Digital has sparked a revolution in how banks think of their role in people’s lives. They are no longer in the background: they are truly central to the way we live now.
Banks are responding to our digital lifestyles in different ways. The rise of online banking and the rapid adoption of mobile banking apps has prompted some of them to close many branches. In fact, across the European Union, the number of bank branches fell by 4.6% in 2016 – with the total number of branches down by a fifth since 2008. European banks are also consolidating: the number fell by 6% between 2015 and 2016.
Digital has changed the way we live our daily lives
It’s made clock time irrelevant. We no longer need to worry about when a bank is open; digital banking means we expect our bank to be open all the time. Unlike a retail store – where many people like to go to try on something or examine the product they might want to buy – there’s no real reason to visit a bank branch unless you want personal advice. Money moves digitally.
That’s why people are voting with their thumbs. On average, 48% of us use a banking app every week, and 23% of us use one every day. That’s the way we carry out what I call ‘functional banking’. Digital enables that brilliantly. But that’s quite old news. What’s new is the rapid rise in digital payments. Visa reported a huge rise across Europe during 2016, with people more willing to make use of digital wallet services and mobile payments. Naturally, the rapid spread of NFC technologies has allowed that to happen. Europeans are fast adopters of digital payments. We already take them for granted. 58% of Europeans pay for things using their mobiles. A massive jump from just 18% in 2015.
Our lifestyles are pulling new entrants into the banking sector. Pure play banks, like Atom and Monzo, are transforming the market. Monzo’s CEO, 31-year-old Tom Blomfield, raised some of the capital for his bank via crowdfunding. Those new brands, and others emerging all over Europe, are re-defining banking. They are matching what they offer to the lifestyles of their mostly ‘digital native’ customers.
That means they’re working hard to be there for us when we hit our major milestones: getting our first account, going to college, getting married, buying a home, setting up a business, having a family. All of these demand complex financial products and advice. Most of that will be done by humans. It’s where experts add value. But banks are also looking to Artificial Intelligence (AI) to help them serve customers less complex (but still vital) needs.
Some are calling it ‘self-driving banking’ where AI automates the way we interact with our money. As Carlos Torres Vila, CEO of BBVA in Spain said in an interview with CNBC: “Really, people don’t like banking; it’s boring. It takes time, [and] causes them stress. What we can do is leverage data and AI to provide people with peace of mind, really having an almost magical experience that things in their financial life turn out the way they want it.” And, of course, automation – from machine learning to chatbots – can make banking more efficient and productive behind the scenes in all areas of the organization.
At Fujitsu, we’ve been around long enough (more than 40 years serving the financial sector) and we understand that business is never all-or-nothing. The future will not purely pure play (if you’ll forgive the word play). It’s somewhere in between.
The priority is to create an ecosystem that facilitates customers’ needs, provides advice, and consolidates data to achieve true customer value. And do it all compliantly. That demands simpler banking processes, secure connectivity to deliver open banking, and a high-quality digital customer experience. Creating that outcome is done through consultation. Which is why Fujitsu emphasizes its consultative approach. We work with you to co-create solutions based on a framework that covers IT and business strategy, benefits management, process improvement and optimization, as well as the vital people-centric change.
 The Guardian: July 22nd, 2016