How the future of banking is shaping up as technology evolves

Imagine, walking up to a small banking kiosk with bright digital signage that isn’t staffed by a teller. If you have a question, rather than speaking face-to-face, you’ll video conference or online chat with a banking representative. If you need to cash a check, you can use a cash dispenser machine that has customer recognition techniques. Does this sound like a science fiction movie?
In fact, such a future is not far off. In a few years, the majority of transactions won’t involve traditional full-service branch banking; instead, the industry is evolving towards automation and alternate channels like mobile, online and self-service.
Branches still play an important role, but the operating expenses and increased cost of brick and mortar has encouraged low-cost self-service banking options.
“In the world of self-service banking, customers can interact with their bank using more channels than ever, and those channels can have a significant impact on customer satisfaction and bank revenues,” says Jarrod Long, vice president of treasury management at Westfield Bank. “Banking is moving in a direction where customers demand self-service options from their financial institutions.”
Smart Business spoke with Long about banking industry trends where convenience and customization are the norm.
What are some signs of banking changes?
Recent studies show that smartphones and tablets are driving self-service adoption and growth. Self-service banking channels allow customers to perform day-to-day banking without stepping foot in a branch. Instead, they use online banking, mobile banking and high-functioning ATMs.
At the same time with branch transactions declining 10 to 15 percent annually, some banks are choosing not to have a branch in every neighborhood. In-branch transactions can cost significantly more than online, so many banks encourage customers to use more self-service options that will produce higher revenues.
You mentioned the benefits of self-service and online transactions for banks. What about for the customer?
Self-service banking has extended banking hours, giving consumers the ability to bank any time they see fit from making deposits to transferring money between accounts. As technology evolves, banking, like other industries, must keep up with customer expectations — and the need to get information right away.
In the business world, everyone is so busy, self-service, online and mobile options are a great fit. After the day is done and the bank has closed, business owners or employees can check balances, initiate payroll or make deposits with a remote capture machine. That’s basically a scanner connected to a computer that allows you to deposit checks into a business account. At Westfield, about 70 percent of our commercial deposits come into the bank through remote check capture.
Another convenient tool is the adoption of mobile deposit, where business customers take a photo of a check to process the deposit. Mobile deposit doesn’t make sense for everyone, because there’s usually a cap on the number of checks and dollar amount you can process.
What will the branch of the future look like?
Larger financial institutions are already closing some branches as foot traffic decreases. They have started developing branches of the future, which will be very different than what we experience today.
These branches will be multi-channel and multi-device environments with digital signage and recognition techniques across all customer interfaces. You can video conference with a teller or use a cash dispensing machine to get different denominations of bills after ID verification.
It likely will be some time before these take over the traditional branch, but that’s the direction banking is going.
How is mobile banking evolving?
Mobile is not viewed as new technology now, so customers, young and old, have become more comfortable with the application. Mobile banking also has become more user friendly. The newer versions offer easy navigation menus and visual tutorials that provide step-by-step instructions.

Yes, there’s still hesitation for some who are worried about security, but more people are asking for it on a daily basis because it makes it easy to bank anytime, anywhere.

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