The Future of Branch Banking and Lending

Alex Jimenez

September 1, 2021

These are the data, customer experience (CX) and artificial intelligence (AI) stories we’re reading here at Finalytics.ai this week.

The Future of Branch Banking

Much has been written about the acceleration of digital adoption coming out of the COVID pandemic. It is undeniable that the pandemic has impacted consumers and how they interact with their financial service organizations. It has also affected the expectations of those consumers. To understand this impact, Temenos recently conducted a study on the future of the banking industry based on results from a survey of European and North American bankers.

Key findings from this survey:

  • “65% of bankers believe that the branch-based model will be ‘dead’ within five years, up from 35% four years ago”
  • “Four in five believe that banks will seek to differentiate on customer experience rather than products”
  • “47% expect their businesses to evolve into ecosystems over the next two years, partnering with both banking and non-banking third parties”
  • “Two-thirds of banks see new technologies as the biggest driver of change for the next four years, up from 42% three years ago.”

The study is free to download here.  Finextra also shared a video with Kanika Hope, Chief Strategy Officer at Temenos, discussing the report.

 

The Future of Lending

As a contributing writer for BAI, Dawn Wotapka looked at the same shift but focused more specifically on digital-lending. She spoke to several intellectual leaders in the space to understand how to address the transformation. Using their observations, Wotapka spells out how the industry should respond.

“The first step ‘starts with the understanding they are in the process of being disrupted,’ says Rich Edwards, CEO of Mindspan Systems.”

Among the observations shared, Wotapka quotes Alex Armitage CEO and founder of Nectarine Credit, a fintech software company managing business credit applications.

The traditional definition of a lender is blurring, so big tech companies and smaller startups are jumping into the game in ways that are new, different and creative.

 

Driving Innovation in Customer Experiences

We often hear from most organizations that they are customer-focused. Unfortunately, many of them struggle with truly putting their customers at the center of what they do. In an article in CMS Wire, Jason VandeBoom, Founder & CEO of ActiveCampaign, asks

What actions can leaders take to ensure their customer experience (CX) consistently delivers and innovates for the people they serve?

VandeBoom explains the “three essential guidelines to driving CX innovation from the top down.” It’s not just about data—it’s about insights. Read the article in CMS Wire to learn more.

 

Insights From Data Using Machine Learning

Financial service companies continue to seek an edge from data. Unfortunately, a majority of community-based organizations struggle with the amount of data. Giuseppe Leone, Consumer Insight Manager at Giorgio Armani, writes in an article in Brandingmag that machine learning can be the key driver to create value with big data.

Leone notes that there is some “confusion about big data and machine learning” that requires clarification. He then explains the two phases: “training and prediction.”

The mechanism by which machines learn is very similar to the way humans learn. However, machines need to be trained on huge data, be it customer purchases, Facebook posts, or Instagram images. This need explains why, although many of the machine learning models were conceptualized years and sometimes decades ago, in the management field they have only recently begun to be talked about.

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