From contactless payment options and the ability to pay someone electronically to instant visibility and access to accounts, consumer expectations have shifted—and banking services providers must pivot accordingly.
It’s no longer a question of if the future of banking will be digital. The answer is a resounding “yes!”
Between evolving customer expectations and a pandemic-prompted acceleration of the financial services industry’s digital transformation, digital banking has become a basic requirement for most banks. Today, traditional banks have no option but to adapt in order to remain competitive.
While most banks still focus on building customer-centric digital banking solutions to compete with modern fintech options, many banks have learned the value in allowing fintech companies to leverage their “banking as a platform” (BaaP) options to partner in accessing new customers.
What Is Digital Banking?
By digitizing traditional banking services, digital banking opens the door for financial institutions to evolve beyond outdated, private-banker-versus-teller, core-constrained, branch-hours-based models. Traditional branch locations and banking systems have become unnecessary and frankly cumbersome to most consumers, and with fintech companies redefining expectations by delivering efficient on-demand banking services to consumers’ fingertips, trends emerging in the digital banking space now appear to be here to stay.
What the Future of Digital Banking Looks Like
So, what does the future of digital banking hold? The future of digital banking will see banking, payments and investment solutions merge into simple, secure and comprehensive apps. By providing access to solutions previously only available to the wealthy via their private bankers, digital banking services are creating full suites of financial services that are increasingly borderless and absent of actual bankers themselves.
The future of banking will not only look different due to more rapid digital adoption, but in a post-pandemic world, consumers will increasingly demand physically safe access to banking services. From contactless payment options and the ability to pay someone electronically to instant visibility and access to accounts, consumer expectations have shifted—and banking services providers must pivot accordingly.
How the Rise of Fintech Drives the Digital Banking Evolution
Fintech companies, by their very nature, create new products and solutions to meet these constantly changing demands by wrapping technology around the core banking functionalities. We have apps to organize our pictures, our friends, our favorites, etc., and the future of digital banking will bring financial technology tools to help us organize our financial well-being, as well. Structured around our goals and income, digital banking solutions must meet customers’ financial needs in a connected, seamless manner.
Savings accounts should have sub-accounts for each of our unique savings goals, whether the objective is a new mountain bike or a family vacation. Investment accounts should also be designed around goals like a down payment on a house or retirement. And much like private bankers, who help their clients access the best ways to borrow, spend and save their money based on their unique portfolio and needs, the future of digital banking will involve digital apps acting as a private banker for all.
This approach to the future of banking will bring instant visibility and direct access to loans, insurance, bill payment tools and credit solutions that are prequalified and tailored to an individual’s distinct situation.
Borders become blurrier every day as our global community grows along with the need to spend and receive money from anywhere in the world. Whether traveling abroad, buying products from other countries or becoming an expatriate, the need for multicurrency cross-border banking and payments solutions dramatically expands on a daily basis. Fortunately, the future of digital banking will simplify and support global banking solutions.
Artificial intelligence and customized digital solutions mean there really is no need for bankers in the future. From the decline of brick-and-mortar bank locations to cardless payments and the rise of fintech services and personalization, the future of digital banking appears bright, but evolving consumer expectations require a new level of innovation and forethought.
As the age-old proverb says, “If you give a man a fish, you feed him for a day. If you teach a man to fish, you feed him for a lifetime.” The future of digital banking is teaching consumers to “fish,” or manage their entire financial well-being by providing access to ever-evolving digital tools customized to their specific financial inputs, needs and goals. The financial institutions that succeed at creating digital solutions that seamlessly combine people and technology will be well-positioned to capitalize on the future of banking.
Chad Butler is the president and COO of Marygold & Co. He brings over 20 years of experience in card issuer processing/program management, banking and electronic payments industries coupled with a strong entrepreneurial background. Chad is excited to introduce a next generation fintech platform to the United States that redefines expectations.