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The future of the banking sector in the new normal

  • In the last year, 11% of bank customers switched banks and just 31% of customers believe their financial institution knows them well and are aware of what their needs are.

  • According to Jaume Portell, CEO and co-founder of Beabloo: “In this new context, the sector must be capable of combining their digital and face-to-face interactions, optimizing their branches to meet all of their customer’s needs.” Institutions such as Liberbank or Banco del Pacífico, in Ecuador, have already begun this process.

  • As a result of the pandemic, 57% of bank customers prefer using electronic banking services and 55% prefer using mobile applications to operate with their bank.

The banking sector has undergone many changes in the past few years, especially since the introduction of digital banking platforms and as a result of the pandemic. Customers nowadays are seeking a simplified, integrated and unified experience for all their interactions and platforms, which makes digitization an essential element in the future of banking in terms of bank transactions but also of their physical spaces.

According to Microsoft’s 2020 Digital Transformation report of the banking sector, the industry is at a defining moment where competition for customers is fierce since it is very easy for customers to switch banking institutions. During the last year, 11% of bank customers switched banking institutions, especially among virtual banks. In this scenario, personalization is a key element setting banking institutions apart since just 31% of customers believe their financial institution knows them well and are aware of what their needs are.

“In this new context, the sector must be capable of combining their digital and face-to-face interactions, optimizing their branches to meet all of their customer’s needs. The omnichannel financial center, which brings together the digital and physical worlds, is key to continue expanding the industry and improve the customer’s experience”, explains Jaume Portell, CEO and co-founder of Beabloo, a pioneering technology company developing solutions to make physical spaces more intelligent.

The report also says that 32% of bank users are already doing their bank transactions through mobile devices, demonstrating the exponential growth experienced by online banking. To this we can add that 85% of bank interactions in 2020 were conducted automatically. Additionally, todays customer expects a faster and satisfactory service by banks offering online services, where 16% of customers expects to obtain a response to their questions or complaints posed on social networks in less than one hour.

The digitizing of branches

As part of this paradigm shift, it is inevitable to ask ourselves what will be the end purpose and the design of tomorrows banking institutions. These institutions must offer an experience to the customer that is innovative and attractive but also very practical and functional, demonstrating its relevance within the new banking context and justifying the importance of using them to carry out the most important transactions.

“We are considering creating spaces that are fully digitalized, with a branch design that is open with interconnected technologies, innovative devices, advanced analytics and digital identity that encourages customers to use them due to the attractiveness of digital and modernized environments”, explains Portell.

This is a reality that we are already beginning to observe nowadays; banking institutions such as Liberbank, Banco del Pacífico (Ecuador), TBC Bank (Turkey) and 90% of the banking institutions in Lebanon are already working with Beabloo to digitally transforming their branches.

Digital transformation has been stepped up because of COVID-19

COVID-19 has had a great impact on all sectors of society and the banking sector is no exception. Since this is an essential service that needs to remain open, it needed to adapt quickly to find solutions adapted to the new reality and to changes in customers’ behaviors.

During the pandemic, digital agility has helped banks respond quickly to their customer’s needs and demands. Those that were not able to do this have been left behind. As a result, nowadays 30% of bank users are willing to switch their primary bank for one that is technologically proficient. According to the World Retail Banking Report 2020 by Capgemini and Efma, 57% of bank customers prefer using electronic banking services: 55% of customers prefer using mobile applications to operate with their bank and 21% prefer interacting with their bank using virtual assistants and automated voice assistants before going to the branch in person.

For this reason, now more than ever, it is important for branches to exceed their customers’ expectations. Actions such as the digital transformation of bank branches, implementing technology and artificial intelligence and transforming them into interactive spaces will be the actions that provide added value to the user’s experience.