Dilemma for the Banking Industry

The dilemma for the banking industry: current customers and the future

The banking system, or if you like, the network of financial services, is undergoing a profound transformation that had already begun years ago and has been accelerated further by the COVID-19 pandemic. And all the signs tell us that the disruption brought about by new technology is clearly focused on providing more personalised, niche services to establish new connections and as yet unexplored market opportunities.

We have moved from an environment where we had large impact windows to a new environment where the windows are much smaller but there are many more of them. In fact, there are now more windows than ever before and there will probably be many more in the future. And on countless occasions in the past, we at GDS Modellica have explored the host of possibilities created by conversational banking, artificial intelligence and adopting customer-focused processes and structures.

As a result, there are more opportunities than ever and new avenues to explore, but it is important to be very wary of abandoning those customers who, for one reason or another, have yet to start this journey. Many people still cling to the reassurance of “physical contact” despite the unstoppable trend of delocalisation as the banking industry becomes ever more digital. In fact, a recent study published by Banking Dive has laid bare the real risk of these two worlds, the physical and the digital, becoming disconnected.

The sector would be doing itself scant favour if, in the search for new market opportunities, it left behind huge numbers of customers demanding more traditional services. It is estimated that bank branches could well be extinct in the USA by 2034, and whilst this might appear very soon, there are still 13 years for people to do their homework and do it well.

As we often do here on the GDS Modellica blog, we’ve compiled the main insights into an infographic. Here is what the current dilemma between current customers and the future looks like for the banking industry.