In the age of mobile banking, what is the role of the bank branch?

BluePaper: Mobile Banking - Will Smartphone replace Bank branches?
BluePaper: Mobile Banking – Will Smartphone replace Bank branches?

To survive in the 21st century, banks must reinvent their entire spectrum of customer engagement, including branches, online, and mobile channels. Mobile banking is becoming more and more popular, and fewer everyday transactions are taking place at physical branches. Mobile devices are embedded in the day-to-day lives of billions of people. Our latest report, “Will Smartphones Replace Bank Branches?” provides insight into customer trends and expectations regarding mobile banking and what the future holds for branch banking. The study also includes examples of innovative banking transformations that have already taken place around the world.

Most mainstream banks today provide mobile services of some kind, even if it’s just balance enquiries and bill-paying. But this does not necessarily mean the end of branch banking – far from it. The traditional retail banking model with the physical branch at its centre is fast becoming obsolete. Future banking is clearly in the realm of omni-channel service delivery. While it makes sense to automate the delivery of certain services over the cellular network, other transactions are better suited to online delivery, and yet others are most appropriately delivered face to face. The onus is on the banks to re-think the role of the branch and provide appropriate delivery channels for the different ways clients interact with their financial institutions.

According to Jupiter Research, a billion people are expected to be using mobile devices for banking purposes by 2017 and will expect to be able to interact with their financial institutions whenever and wherever they want. Any bank unable to meet those expectations will likely find itself sidelined, particularly among younger customers (see Consumers and Mobile Financial Services 2013, Board of Governors of the Federal Reserve System).

Much of the information in our report derives from an empirical study conducted by GFT in May 2013. 894 individuals from Brazil, Germany, Spain, the UK, and the US were asked 15 questions designed to provide insight into how people in those countries use bank branches and mobile services, and how they envision the future of banking.

Here are just a few of the pointers for banks that emerged:

  • Banks need to continue supporting traditional channels while broadening their mobile offerings
  • Mobile banking applications must support multiple operating systems (at minimum iOS, Android, and Windows)
  • The importance of bank branches should not be underestimated in the rush to mobile
  • Banks should consider segmenting customers who don’t need face-to-face services into a mobile-only environment
  • Banks must be aware of the technology, security, engagement, and risk management challenges in mobile banking services
  • Mobile customers are attracted by value-added services, customised consumer experiences, and advanced digital tools

This is a critical time for the financial services industry, and service delivery decisions taken now will impact profits and customer loyalty for decades to come.

GFT has created a Mobile Finance Practice to help financial institutions define and develop mobile banking services. Following a three-step approach, GFT is able to build rich multi-platform mobile applications that will help mobilise businesses with added-value services.

Download the free study here and get ready for the era of omni-channel banking.