With all due respect, the label "digital banking" does not accurately describe the stronger impact technology is having on banking right now. Digital, as it relates to Information Technology, is a generic 55-year-old word that described the transition from
punched card processing to digital computers. It was a giant leap forward at the time. But to use the word digital now is selling short the real impact of the current banking transformation. Thus the need for a more powerful name - "Bankerless Banking."
My point is, if you want to create a dramatic name to represent a significant evolution in banking, use one that is new, meaningful, industry-changing and attention grabbing. If bankers are insulted by this, then it must be right.
Jamie, Brian, Michael, and John, the top four bank CEOs in the U.S., are already embracing Bankerless Banking because they can't afford to ignore it. They are closing branches and firing employees. But they won't like my new name because they themselves don't
have the skills to run what banks will become. The old normal ended. Duh!
This idea is not entirely mine. For example, back in the sixties, when Dale Reistad introduced the idea of a checkless society and a cashless society, not many of us believed it. But we went along because we saw the merits of better, faster, increased productivity
and cost savings. Now I believe even the toughest cynics will admit that the use of paper checks has declined significantly, and cash has been sidestepped in part with swipes. Dale was right; the industry just took too long to transition from the sixties
to the two-thousands.
The same slow rate of transition is happening right now. It takes too long for banks to move towards dramatically different methods of doing business. But just a few years ago, bankers were building branches like Starbucks was creating coffee shops. Adding
more of the same is a lot easier for a banker than doing something entirely different. And following others off a cliff to gain quick profits also seemed like the thing to do when the front line, wallstreeters, had a track record for making money by labeling
packages of investments that no one understood. Remember subprime mortgages? Why didn't they call them Deadbeat Mortgagors?
This is what I think Bankerless Banking really is.
Bankerless Banking is the extent to which a bank or credit union uses electronic banking services that their customers can use to perform their routine banking tasks. It is self service. It does not rely on in-your-face bank employees. It does not depend
on physical structures, aka monuments of glory. It does not have to be 100%. It should be real-time so as to achieve a one-touch-transaction performance. Bankerless Banking can be as much or as little as a bank needs. And here's the surprise. Bankerless
Banking has been going on for decades, but it was piecemeal, one component at a time.
There are now 24 components, some old, some new, and some I don't even know about yet. Bankerless Banking will always be a work in progress, a philosophy that the great minds of technology companies have embraced as a chipped-in-stone strategy. In banking,
Automated Clearing House
Platform Automation where customer defines platform
Interactive Video Banking
Social Media-based solutions
NonBank-based processor solutions
Any time, any place, any legal customer
Data Retrieval by customers and bankers but no hackers
Decisioning by customers and bankers
Show me a bank that can demonstrate the above performance, and I'll show you a bank that has been to market, carefully acquired existing vendor solutions, implemented their capabilities, trained its infrastructure employees, explained the new relationship to
its customers, and has achieved the distinction of a Bankerless Bank. Also I'll show you a bank that does not employ hand-holders and schmoozers. Going forward, the job of bank employees will be to build the technology infrastructure so that bank customers
can get whatever they need on their own. Impossible you say? Ask Apple, Google, Microsoft, Amazon, and LinkedIn. They're not only staying in business, they don't have a capital problem. The Bankerless Banking model is a profitable model.
Where will your bank be down the road? Applying for a bailout? Merging with another bank? Responding to regulatory threats? Closing? Or converting from the old model to the Bankerless Banking model? And please remember, just like checkless and cashless
didn't disappear entirely, don't expect bankers to disappear entirely. They will just be upgrading their value to customers by doing more mindful tasks rather than grunt work.