Your Friday fix for global fintech and payments news
Will retail banking ever be the same? Apparently not according to consultancy firm, Kearney, who predict that 1 in 4 European bank branches will close their doors for good in wake of COVID-19. With the pandemic pushing consumers ever further into utilising digital payment solutions, retail bank branches are likely to permanently change, offering different services and declining in numbers. In other news, ATMs have seen a growth in numbers in many countries around the world, and Diebold Nixdorf ask just what ATMs, and self-service in general, will look like in the “new normal”.
Our weekly round-up brings you a dose of some of the biggest news announcements from the past seven days so you can keep an eye on all that’s shaping our world this week.
- One in four retail branches to close in Europe as digital interactions mushroom
- Most countries see growth in ATMs despite cashless payment growth
- What Does Self-Service Look like in the “New Normal?”
Up to 40,000 bank branches will close across Europe in the next three years, according to a study by consultancy firm Kearney. With many customers making the switch to digital channels, partially due to developments in the way that people choose to bank, but equally accelerated by COVID-19, Kearney predicts that 1 in 4 European bank branches will permanently close. Additionally, they predict that 70% of account openings, deposits, consumer loans, and credit card applications will happen remotely over the next three years.
Kearney commented on their study, saying that: “For those customer processes that have been rapidly digitised in the early days of the pandemic, these now need to be stress-tested and improved as required to ensure long-term operational resilience. The same goes for any digital processes that were already in place, which also need to be stress-tested for a more integrated and digital banking era. It’s a win-win situation — digital banking is not only better for the customer, but cheaper for the bank.”
According to Global ATM Market and Forecasts to 2025 by RBR, despite the rise in payment card usage and cashless payment methods reducing general demand for ATMs and cash, many countries and sectors still remain heavily cash dependent. While the number of ATMs worldwide fell in 2019, this can largely be attributed to China, where consumer behaviours have steadily moved further towards alternative payment methods – eliminating 30,000 ATMs from its ATM network. If China is taken out of the equation, it appears that global ATM usage is higher than it was years prior. 15,000 more ATMs were in operation at the end of 2019, compared to the end of 2018. Almost half of the major markets which the report examined in detail saw an increase in ATM numbers.
In a new blog, Diebold Nixdorf asks what self-service will look like in the “new normal”. COVID-19 has not necessarily changed the strategy of banks and financial institutions (FIs), but has accelerated developing trends. At the end of all this change, what will the “new normal” look like?
According to DN, in the short term we have experienced sudden, often panicked changes, to the way we bank. Customers rush to obtain cash and liquid assets, ATMs and branches become overrun, and internet and customer service call centre traffic reach all time-highs. And, SMBs overwhelm banks and FIs with requests for loans, and loan payment suspension. In the mid-term to long-term, self-service transactions will be increasingly relied upon, but (contrary to Kearney’s belief of closing doors) this doesn’t mean we will see an end to bank branches entirely, or physical storefronts. Cash usage will still continue to be an integral component of most people’s financial lives, but the way that we interact and experience cash will be different. Contactless payments will see exponential growth as consumers prefer a less touch-heavy interaction, with physical interaction even at ATMs, being the actual handling of cash, with authentication of the user happening touch-free or on a personal device.
Ultimately, DN conclude that: “Consumers expect to conduct their entire banking world in the channel they choose, when they choose it.”