In the next five years or so, more people will use their phones to deposit checks and pay bills while cash and paper checks continue to fade from our daily financial dealings.
It’s all part of the growing dominance of digital transactions in the banking world, where customers expect convenience, rapid service and security.
“The consumer today is not the same as the consumer five years ago and won’t be the same in the next five years because digital banking is going to be much more widely adopted than it is today,” said John Oxford, Renasant Bank’s director of corporate communication and external affairs.
But don’t worry about your neighborhood branch going away soon. New branches will be built, though on a smaller scale and with fewer tellers.
“There’s always a tradeoff, but the technology will make things more efficient as well as easier, versus going to a branch,” said Oxford.
“So while tellers may decrease, banks will need more tech savvy people in the security area to monitor their online presence.”
Oxford keeps tabs on the emerging financial products and services making their way to his industry. Renasant and other large banks work to stay ahead of the new technology so they can stay competitive.
“If you don’t follow the next level of product, you may find yourself like that record store that didn’t think iTunes was going to be successful or Blockbuster when you didn’t know about Netflix,” Oxford said.
Research has shown that young consumers in the workforce want to do everything digitally and though they rarely go to a bank, they like knowing it’s there for them.
“Even if they go in it maybe once or twice a year, they want to know there’s someone they can talk to if they need to,” he said. “Those are the folks banks are going to have to start attracting.”
While many services can be handled by a phone, not everything can. Some bank processed like getting a loan can be started online but still need to be finalized inside a bank.
“From investments to retirement strategies to borrowing money you really need a person to help you do it properly,” he said.
Meanwhile more banking apps are rolling out, offering services like creating a budget and transferring money from one person to another.
Want to make a withdrawal but don’t want to wait in line? A new app lets customers set up a withdrawal before going to an ATM so there’s no waiting on the cash to be dispensed. “It cuts down on time and raises security,” he said.
ATMs show how far banking technology has come. “They used to be just a cash machine and then you could make a deposit,” said Oxford. “Now ATMs have become Skype in a box. Basically you can talk live with a banker remotely. They can do almost everything a bank can do.”
Apps were first used to check bank balances. “Now we call it your bank in your pocket,” he said. “You can do just about everything that doesn’t involve cash.”
Oxford said banks are closely watching the rise and growing acceptance of crypto currencies like Bitcoin, and the open ledger blockchain technology which have the potential to drastically change how money is transferred.
“Blockchain and Bitcoin are not something adopted by any banks right now. But once they are regulated properly and better understood by the consumer, as well as the financial services industry, they, especially the blockchain, may provide a future highway for more efficient and less costly financial transactions,” Oxford said.
For now and into the future, banks remain focused on giving their customers what they want.
“Customers want the convenience of using their bank when they want to, they want a location to trust and to know their bank is involved in the community,” Oxford said. “If you do those three things, you’ll be a successful bank.”
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