The big news in U.K. retail banking last week was that the Royal Bank of Scotland is planning to close another 158 branches. The bank states that basic transactions have fallen by 43% in 7 years. Yet again, this announcement throws into relief the old discussion
about the place of the branch in an omnichannel world. There's been much written on both sides of this argument over the years. I myself have argued several times for the ongoing role of the branch.
Yet, with new technologies emerging faster than ever, I'm having to ask myself whether there is indeed a future for branch banking. In these situations, I often find it is helpful to refer to the great predictor of technological trends - Star Trek. Star
Trek predicted tablets, universal translators, natural language computing, and hand held communicators well before technology was ready to make them a reality.
I very much doubt that the Star Trek universe contains bank branches. I suspect technology means Federation credits aren’t deposited in person, and face-to-face meetings happen on the holodeck. And for the same reasons, I suspect it will be the same in our
universe. Today’s technology advances will soon eliminate the need for bank branches. This is not to say that person-to-person interactions will go away. However, they can be delivered in ways that are far more convenient for customers.
We will see person-to-person customer interactions shift in greater numbers to digital channels via web chat, video, and ultimately augmented reality. As the last few in-branch transactions are digitised, we will see this process accelerate. In parallel
to this shift, new technologies will speed up the pace of automation in customer interactions, making such activities cheaper and more scalable for banks to deliver.
Royal Banking of Scotland is already leading the U.K. field with the launch of its Luvo chatbot. Cognitive computing and neural chat are already making it possible for simple queries to be answered in natural language. As the sophistication of these technologies
develops, they will look more and more like futuristic advances in Star Trek.
Banks need to contemplate the ultimate demise of branches. They need to jump to warp speed now. This is the time to invest in new technologies to deliver seamless omnichannel customer journeys – either automated or person to person. If they fail to do so,
banks will run the risk of falling into a wormhole.
Let me know what you think in the comments below.