Branching Out: How Will Banks Move From Bricks and Mortar to Digital?

Traditional brick and mortar banks are slowly but surely becoming a thing of the past. Even before the pandemic, physical branches have been disappearing from our streets at a frightening pace. “We know that the future of banking is digital,” says Jan Ludik, CEO of Traderoot. The trend of physical bank closures has largely been driven by the rapid increase in online and mobile banking, followed by a rapid decline in the use of physical branches.

Adapting to evolving customer preferences

The main reason for the shift away from brick and mortar in the banking sector is far greater than a simple cost-cutting strategy. The primary reason for the closure of physical banking branches is the banking industry’s response to evolving customer preferences. While physical banks will not disappear completely, there will definitely be fewer.

Traditional banks need to adapt to customer demand and harness the extraordinary technological progress we are currently experiencing if they wish to remain relevant. Nowadays, people are simply too busy to wait hours in a physical bank when the service or product they require or need assistance with can be provided digitally. Digitisation can not only play a massive role in helping banks become more efficient and boost profitability, but it can also lead to greater customer retention by providing more sophisticated products and services.

How FinTechs can facilitate digitisation

New competition from fintech startups are intensifying the competition within the banking industry. Banking organisations of the future will leverage the power of technology to simplify the access to products and services for customers, not saying that physical branches don’t have a future. There will, however, be fewer of them, and they will look and feel different compared to the branches we know today.

Banking is evolving, so banks will need to adapt in order to remain relevant. Fintech solutions have the ability to help banks automate countless manual processes, increasing efficiency, enabling more strategic allocation of resources, reducing costs, and decreasing human errors.

The fact is banks need to evolve with time. With this being said banks need to ensure that their clients understand the reason for the changes and are to be supported through the adjustment. The digital age is inevitable and will have to be incorporated into our everyday lives. Almost all people's daily activities are mediated in some way or another by computers and algorithms in today's digital society. 

​​Is your bank ready to move into the digital age? Are you ready?