Physical banking in a digital world: The digital revolution and the impact on consumers and banks

Abstract

The Internet and new digital technologies have revolutionised modern society, with strong impacts in the banking world:
• Customer behaviour changed dramatically: customers today are more informed. Online and mobile channels have become more important as sources of information and are at the heart of the consumer purchasing decision, no matter where the purchase is finally transacted (research online, purchase offline (ROPO) effect).
• The new competition: the digital revolution has encouraged the emergence of new non-traditional actors and the market environment is changing rapidly. Competitors are coming from several directions and banks have to adapt their business model in this scenario.
• IT infrastructures: over the years banking players have inherited infrastructure and expensive processes. For that reason, it will take some time to catch up in the digital environment.
• Physical branches: technological innovation and digitalisation also have a strong impact on the physical channel. So, for an adaptation of the branch concept, the offers and services are needed.
There are a lot of improvements to be made in the future: simple products, intelligent IT-infrastructures, cooperation with start-ups and GAFAs (Google, Apple, Facebook and Amazon), branch opening hours, integration of social networks in the customer journey, and so on. The banks with a real client-centric approach and with the capacity to adjust their technological and human skills will have huge business opportunities in the future.