The Bank Branch of the Future - manned by Humans or Humanoids?

We are living in one of the most technologically connected eras in civilization which means that we should be emotionally healthier than ever before as people who matter to us are only a click away and we can connect with them anytime. Therefore it came as a bit of a surprise when in January, United Kingdom announced that it was appointing a Minister for Loneliness thereby acknowledging the sad reality of modern life and loneliness as a worldwide growing epidemic. Thanks to proliferation of technology and advancements in areas such as artificial intelligence and robots and the millennial being more comfortable with texting than talking to the person next to them, we may as well imagine centers of human interactions such as shops and bank branches of the future being reduced to a center of high end devices and machines to execute the transaction with humanoid robots assisting people where necessary. This imagination is further backed by a survey that claims that in the coming 10 years, bankers believe that only 7% of interactions will be in person (either physically or by video conference), including only 15% for wealth firms. Some 83% of those asked thought the primary customer interaction channel would be chatbots and social apps and not even through the personnel sitting at the branches. Therefore on the one hand while we are more connected than ever before, on the other hand our emotional wellbeing looks to be more at risk than ever before.

In short while customers may become increasingly emotional about their money they no longer seem to have any emotional relationship with the custodian of that money and thanks to the financial crisis and scams plaguing the banking world, the customer's trust of the bank is at an all-time low.

Contrast this with where the banks were perceived a few years ago. Banks were seen as a trusted pillar of the local community and the local banker was present at every important community and family gathering. He was the person to whom people turned to when they wanted to understand what was happening around them. The banker in turn leveraged his knowledge of people and the town to make good credit decisions in helping people in need and invest in local businesses. This is in sharp contrast to today where we hardly know our banker, we simply choose that bank which is more convenient to us or imposed upon us due to factors such as salary being credited as technology has commoditized the banking services to a great extent rather than personalizing it. The banker in turn knows us only to the extent of our digital footprints and the information shared by us when availing the different products and services and may not even recognize us until the computer verifies and ratifies our identity.

However, considering the trend of increasing pervasiveness of technology on one side and the emotional disconnect of people on the other side, banks are at an interesting intersection and this presents a unique opportunity for them to reinvent themselves and re-emerge as one of the trusted pillars of the communities that they are expected to serve. Banks can start having smaller branches staffed by people with the focus not being on the transactions themselves but on knowing their customers better. This can definitely help in fraud prevention and detection, passing on some additional key or related information that may not be captured in the bytes and bytes of structured and unstructured data. This may in turn help the bank to offer more tailored products and better credit decisioning to its customers using its vast technological expertise. For example, the customer or prospect is a teacher by profession and he has come to the branch to open an account and furnished the relevant particulars as mandated by the KYC guidelines. However the customer relationship manager at the bank is aware that the prospect conducts tuitions separately and is looking at ways to expand this business also which is not stated explicitly anywhere in his application form as he has just come to open a savings or deposit account. Now the customer relationship manager can proactively come up with ideas to help the customer with his expansion plans thereby influencing the customer's decision making process by acting as his trusted advisor.

This improved knowledge of the customer and the technological advancements of today implies that banks of the future can look to further customize their offerings based on the individual's needs and also improve the pace and intelligence of their decision making process with reduced errors. This in turn will go a long way in improving the trust levels between the customer and the bank.

This could also mean that bankers of the future are expected to have a higher understanding of human psychology in addition to accountancy as getting to know your customers in the future will need one to go beyond the data furnished by the customer during account opening and be expected to be more empathetic and intuitive to the needs of the customer.

Let us imagine the following scenario in the near future. For instance, a customer is facing a medical emergency in his family. Leveraging on technology, the bank may come to know of this as soon as the customer swipes his card or requests for insurance at the hospital terminal. They can immediately arrange for liquidity alternatives for the customer even before the customer can think of it himself. But in this day of nuclear families and near and dear ones being scattered all over the globe and age of loneliness will it not be nicer if the bank is able to step in by sending its representative to the hospital to inquire on its customers wellbeing and leverage bank's clout with the hospital to ensure that all medical needs of the patient is addressed to the customer's satisfaction. Simple acts of kindness such as these can go a long way in rebuilding trust between the bank and the community that it serves because whenever an emergency strikes a family, while money is one aspect people seek constant reassurance which is well served by a human rather than a humanoid.

Final thoughts:

The bank branch of the future may well be one where people and technology co-exist with people bringing in the personal and the emotional quotient and technology the efficiency, accuracy and the preciseness quotient thereby making the bank once again the pillar of the community which it serves.

Reference sources:

https://www.forbes.com (Article:UK has a minister of loneliness- This is how bad loneliness has gotten)

https://www.capitalperform.com/2017/04/28/enduring-as-a-pillar-of-your-community-aba-bank-marketing/

https://ibsintelligence.com/ibs-journal/80-of-bankers-see-open-banking-as-an-opportunity-not-a-threat/

http://theconversation.com/banking-sector-will-be-ground-zero-for-job-losses-from-ai-and-robotics-83731

https://thefinancialbrand.com/52735/robots-artificial-intelligence-ai-banking/

https://www.gensler.com/research-insight/gensler-research-institute/retail-banking-trends

https://www.cisco.com/c/dam/en_us/about/ac79/docs/fs/Future-of-Retail-Banking_5-Year-Vision.pdf

https://www.finextra.com/blogposting/11676/banking-on-the-internet-of-things-iot