Digital banking has become an even bigger trend this past year, as COVID-19 ravaged the world and forced lockdowns on physical branches. As a result, customers have turned towards more digital banking and self-service options, and that trend shows no sign of slowing down.
While physical branches have not disappeared entirely and will still have a role to play, they will need to adjust to two major digital banking trends in order to succeed in this post-pandemic environment.
The first trend is an increasing customer desire for self-directed banking, Jeff Bender, VP of digital solutions at Diebold Nixdorf, said. Customers want to have completely integrated experiences across all banking platforms.
“The ability to initiate a transaction from one channel and complete that in another is not only increasingly important to the overall convenience created for the consumer, but when done right, it also drives down support costs and creates more efficient operations for the financial institution,” Bender said.
The second trend bleeds into the first, since as a result of this desire for more self-directed banking, financial institutions have had to rethink the physical branch experience itself.
“There is still a significant need for a physical presence from most financial institutions, but the experience is evolving. In fact, following the pandemic, some FI’s have reported as much as 70% of their deposits have migrated away from teller assisted transactions to self-service channels,” Bender said. “In a survey in late 2020, 55% of customers state they plan to visit bank branches less than before, and over 25% indicate a desire to avoid in-person interactions. Whether these statistics remain true in a post-pandemic world or not, the behavior change is forcing financial institutions to look at ways to respond in order to better serve their customer base while also looking at ways to maximize the opportunities they have for consumer engagement.”
Banks are already embracing these trends through a variety of strategies, including more advanced ATMs. First Citizens National Bank, a Tennessee-based bank with 26 locations, upgraded its ATMs to connect to its FIS core banking system to deliver a more teller-like experience, according to a case study.
In particular, the bank deployed Diebold Nixdorf’s Vynamic transaction automation to enable authorization and processing credit and debit card transactions, access deposits in real time and move it around to multiple accounts and pay bills directly at the ATM.
“We are always striving to deliver an exceptional experience for our customers — and now we can offer advanced transactions through self-service capabilities at the ATM that were previously only available over the counter,” Judy Long, COO and president, First Citizens National Bank, said in the case study. “By implementing Diebold Nixdorf’s Vynamic transaction automation, our ATM network plays a more significant role for our consumers and enhances their banking experience by bringing advanced self-service solutions to them.”
In addition to these services, Bender said that ATMs will also increasingly deliver one-to-one interactions such as two-way video sessions with bank tellers. On the self-directed banking side, ATMs will also interact more with other banking systems, such as mobile apps.
“We’re seeing an increased interest in technologies that allow consumers to drive the ATM directly from their digital banking applications — starting the transaction from a mobile device and completing that transaction at the ATM without having to physically interact with the ATM at all,” Bender said. “This technology not only improves the consumer experience, but provides a valuable capability for in branch experiences as bank employees can direct consumers and assist consumers with cash assisted transactions directly through the self-service channel.”
Despite these trends, it may be tempting for banks to go back to business as usual now that the pandemic is beginning to recede in some regions. But now that customers have had a taste of these alternate tools, such as digital wallets and apps, they likely will not want to go back to old models.
“The pandemic has forced consumers into these alternative channels out of necessity — they had no choice for a while. However, consumers are realizing that not only are these new ways to interact “not that bad,” but in many ways they’re actually easier and more convenient,” Bender said. “Citibank saw an 84% increase in mobile deposits and a 10x increase in the usage of Apple Pay during the height of the pandemic. While certainly as things return to normal, these consumers will engage in other channels as well; many have become very satisfied and will not go back to their old ways.”
As a result, banks and financial institutions in general will need to continue to think and work with companies such as Diebold Nixdorf on developing solutions that meet customers where they are at with better digital banking experiences that tap into the trends of self-directed banking and transformed branches.