Digital-first, not digital-only
For traditional banks, the growth of mobile technology – and the rise of digital-only banks – is often cited as a reason for the significant rate at which their branches are closing. Since 2007, nearly 50,000 branches across Europe closed their doors for good, with banks stating that this is due to the falling number of customers using their brick-and-mortar establishments. As a result, traditional banks seem to be diverting their attention increasingly towards their digital offering, but does this shift in focus spell the end for the physical bank?
While a superb digital customer journey is something that all banks aspire to, and most financial institutions do very well at, it is the banks that have a ‘digital-first’ approach, rather than a ‘digital-only’ approach, that are outperforming traditional competitors when it comes to customer service, security and privacy. This is, in part, down to the millennial generation who have always had access to technology, so it is unsurprising that it is shaping the way they want to bank.
Nevertheless, 72% of under 30s in the UK would still prefer to visit a branch in person when it comes to major financial decisions – dispelling the myth that young people rely entirely on their mobile devices for their banking needs. It remains to be seen whether or not the rate of bank branch closures will slow, however, with digital-first banks rising in importance in the UK, it is clear that there is a demand for financial institutions to provide a well thought-through digital experience combined with the comfort of the more traditional branch banking.