Some might refer to this as the Information Age, but perhaps the Digital Age is a better moniker because no matter how much you want to dig your heels in and resist, consumers increasingly want their information, entertainment and services provided through digital means. This demand for all-things-digital isn’t likely to slow down, which means it's not just a focal point for companies like Netflix, Apple and Amazon, but also for financial institutions like yours.
For a growing number of consumers across multiple generations, the weekly visit to a bank is a distant memory. Instead, when these consumers think about banking, they see their smartphone, tablet, laptop and desktop computer as their branch. If your institution has been halfheartedly patching together an online experience for these consumers, it's time to start considering taking the plunge by developing a digital branch.
Defining the Digital Branch
The definition of a digital branch can vary, but essentially, it's a web-based, adaptable, responsive, branded consumer portal that provides some or most of the same services that a traditional branch does. Consumers can access the easy-to-navigate digital branch from their smartphone, tablet, laptop or other device, and unlike a brick-and-mortar branch, they can “go in” and do all their business—from opening new accounts to taking out loans—24 hours a day, seven days a week.
One of the most important distinctions of digital branches is that they give consumers the ability to bank anywhere, at any time and on any device. If this sounds like a big demand to fill, that’s because it is. It’s innovative and disruptive, but ultimately empowering and profitable for financial institutions, as long as they have the right partner coordinating the digital branch integration.
Benefits of Digital Branches
The most compelling reason to provide consumers with a digital branch is that they want one! According to Fiserv, 56% of consumers prefer interacting with their bank through online or mobile channels. Further, they show that 90% of consumers have already accessed online banking and 70% have accessed mobile banking.
And while the trend is clear among consumers of all age groups, for millennials the desire for digital is even stronger—with 73% reporting in a Viacom survey that they would be more excited about financial services offered by companies like Google and Apple.
Beyond the obvious demand-meeting aspect, digital branches also offer opportunities to reduce errors and loan application times. They can be designed to funnel clients to open new accounts and they can increase closing rates for loans, thus increasing customer stickiness and profitability.
Frictionless Digital Banking
Digital disruption in the banking sector often runs up against one giant hurdle: silos. In a time when you need to be connected and agile, data silos present a giant problem. With the right consumer loan origination software (LOS), you can move away from silos and easily connect traditional and digital branches through omnichannel engagement, which integrates the data and systems.
Brick-and-mortar banking is never going to go completely out of style. But as part of an ongoing initiative to satisfy the needs of customers and meet them where they are, creating digital branch accessibility for those who want it is a vital step toward expanding the reach of your institution, increasing returns and increasing wallet share. And your survival may just depend on it.