The coronavirus pandemic has rapidly accelerated the need for digital transformation in the banking industry. As many national and local bank branches begin to close around the country and we see a reported 200 percent jump in new mobile banking registrations and an 85 percent increase in mobile banking traffic amidst the pandemic, the future of the traditional bank branch model is drastically changing, and in many ways, it may be for the better.
The digital adoption of more efficient, contactless transaction options has allowed banks to rethink the traditional branch model, even in a post-pandemic environment. While the industry currently doesn’t anticipate a full transition away from bank branches, as we navigate a changing environment, banks are reevaluating how many branches they need based on consumer behavior and the efficiency of the digital banking hub model. Forrester’s Report ‘The New, Unstable Normal: How Covid-19 Will Changes Business and Technology Forever,’ predicts an acceleration of digital transformation programs and a reduction of bank branches, which is already well underway.
Today’s new environment has catalyzed a much-needed shift in the banking industry. The ‘stay at home’ culture has reshaped the way people and businesses interact with their financial institution and ushered in a new mindset for an industry that was largely reluctant to adapt.
Digital transformation initiatives have existed long before the pandemic and are only now being accelerated due to circumstantial need. Partnerships with fintechs and other digitally advanced platforms have made the last several months much more seamless for banks who have long-prioritized digitization. For ConnectOne, our new normal would not have been possible if it weren’t for our culture of change and digital investments.
During the pandemic, it became evident that some banks were more prepared than others to sustain seamless transactions and customer engagement. According to the ABA Banking Journal, findings from several J.D. Power mobile and online banking studies emphasized the importance of banks’ digital transformation efforts ahead of the COVID-19 outbreak in the U.S. The studies found that consumers value seamless digital experiences from their bank that provide instant access to their financial information.
It is important that with these new changes, banks uphold one of the most crucial tenets of relationship banking: frictionless client experiences. While a true shift is underway, we recognize that the industry and many clients are anxious and reticent about digitizing banking and it’s important that we reiterate that traditional bank branches are not going away. In fact, the accelerated shift towards digital allows an environment for even more meaningful, personalized interactions to take place in our branches, allowing us to take our relationship banking model to new heights.