What is a social bank? Do we need one?

In his book “Digital Bank: Strategies to launch or become a digital bank” Chris Skinner discusses the role of bank branches.

Chris claims the number of bank branches is decreasing from year to year as they are unnecessary in the current digitally connected world.

I agree with the idea, think about the last time you visited the physical branch of the bank, especially during the pandemic. I guess it was quite long ago.

I would say bank branches are not dead they have changed their format. Currently, bank branches are in your pocket installed on your smartphone. You can visit them anytime anywhere and perform banking operations. This is a new standard of the digital world. New standards require banks to be more customer-centric, improve their experience, and make processes seamless.

However, it is easier said than to be done.

Standards are really high, for example, if the user logs in the digital banking app and does not get a loan in minutes then probably the bank is faking the digital.

How do banks achieve this level of digitization?

Data, the oil of modern technologies. Banks need more data than ever because it fuels everything. However, so far banks were only about financials but the experience shows that social media companies and big tech where most of the data is collected.

Now, banks as banks transition to new digital standards they should their approach from only finance to all in one service provider. This approach requires banks to be integrated into the everyday life of customers, offer more than banking and financial services, and most important be social.

Imagine you tagging your location on social media or leaving a post “I am London” the bank sends you the notification “Happy to see you in London. Here are our exchange rates and the list of the closest ATMs”.

Would you like it? Or let me reformulate the question would you be happy to share personal information?” This might seem like big brother is watching you. Especially, when we privacy issues more often in the last several years.

However, banks will take into account the mistakes made by social media websites. Their actions have to be permission-based. If the customers accept that terms they will get more personalized advice and products from their banks.

Banks that achieve truly social advisory level by leveraging these remote social channels for social relationships will be the ones that really excel.