In the digital age, industries in every sector are expected to jump on the bandwagon—if they haven’t already. Needless to say, our world is moving rapidly toward the digital direction, and deciding to withstand these changes will lead to the demise of many businesses. Banking is one of the industries being affected in this current digital climate. Research suggests that companies refusing to move forward with digital transformation could possibly lose 35 percent profit, whereas banks that are up to speed with evolving technologies could gain 40 percent or more. Research also suggests that banks have about three to five years to get with the program, but unfortunately, many banks are only in the beginning stages.
With the rise of digital banking, the majority of customers are no longer visiting physical branch locations. Customers demand faster, more efficient ways of making transactions, and banks simply can’t afford to fall behind. However, there are current challenges that banks must face before tackling new ones. For instance, the economy is constantly changing, and regulations are increasing. Moreover, customer expectations are higher than ever before. So it’s vital for banks to take these challenges into account before aligning their business with customer expectations. Additionally, trends like mobile banking, internet of everything (IoE), banking on the cloud, and the fintech movement, which is the main contender in traditional banking, are all important factors to take into consideration. But the root cause of the changing face of banking is millennials, the largest demographic in the world. For millennials, traditional banking is obsolete. As a matter of fact, 71 percent of millennials would rather go to the dentist than talk to a bank teller (FirstData, 2015). However, they’re far more open about money, with 75 percent of millennial couples discussing it at least once a week, according to a CNBC article. Dr. Jane Greer, a psychotherapist and relationship expert, says “Young people are very up front about the fact that they’re carrying debts, even credit card debts.”
Banks are up for a real challenge as customer demands are constantly changing, but it’s only in their best interest to adapt to these changes if they want to survive the next generation. There’s no use in trying to revive traditional ways of banking—those days are long gone. Millennials are enjoying the convenience of digital banking and generations before are embracing it. It’s time for the banking industry to move forward with digital transformation, because the change is happening now.
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