Banks have failed to capture the true essence of technology for improving quality of service, as well as lacking the vision necessary to capture customers’ imaginations. Meanwhile, other industries have been revolutionised and continue to thrive by the same technology.
America has in the last 10 years been forced to close 10,000 branches. Since 2008, Europe has lost close to 48,000 branches, which is more than 20% of its branch network. There is little doubt that branch banking is on the decline, and online banking is failing to provide a quality service.
On the 10th anniversary of the iPhone, we are experiencing one of the biggest transformations in the history of banking, and technology has a lot to do with it.
Barclays has recently announced closures of the very last branches in Rochford and Castle Cary. Several other towns have been warned of further closure plans. The most established banks are forcing their customers into online and mobile banking, call-centers, and robo-advisory. We are starting to see a major consequential shift in the way people are forced to manage their banking needs.
Unfortunately, this trend has led to an increased distrust and frustration as the personalised service has been completely removed from the equation.
Once you take a branch out of a community, you deprive the customers of that personalised quality of service, and online banking is simply no replacement for those personal relationships which are at the core of providing personalised and high quality service.
The traditional bricks-and-mortar based banking models no longer work as people demand for banks to move with the times and reinvent themselves, but that should not be at the expense of customer care. Simply providing online banking with confusing drop down menus is not the problem solver.
Currently, we are experiencing a major service quality gap in the market, which has created opportunities for a lot of fintech companies that are focused on customer service and user experience.
The focus on technology in banking should be directed at strengthening the relationship between the customers and the bankers, as this is the only way for people to sincerely get a personalised and high-quality service.
Ali Sadr is the Chairman of Pilatus Bank