The number of bank branches in the Netherlands has declined drastically over the past few years; currently, the Netherlands have the lowest bank branch density in all of Europe. Has digital service in the banking sector become complete enough that we can close down the analogue offices altogether, or should we look for new ways to put them to use? This is one of the many questions banks struggle with these days. Digital innovations cause the customers’ needs to change, but that doesn’t necessarily mean a purely digital service is all they need. Don’t customers need any support any more? They certainly do! It’s not altogether the end of the physical bank branch that’s nearing, but in the future they may no longer be the way we know them. And so, it’s up to the banks to reinvent how they can offer added value for their customers.
What other developments does the banking sector need to keep in mind? More and more information is stored in ‘the cloud’, customers use digital financial services more and more, and more and more processes depend or will depend on the internet. The threat of cybercrime grows accordingly. The main motives for cybercrime are theft and the selling off of personal information. What measures can a bank take to safeguard online security? Do we have qualified staff in our ranks to take on that task? What costs will be involved? These are worries that might keep a bank from innovating and taking on the risks of the future.
But besides cyber hazards, digitalisation also provides many solutions. For a time now, the creditor role of the bank has been faced with the introduction of crowdfunding. Online financial platforms to that effect, also known as FinTechs, have a profound effect on the bank of the future. Are FinTechs a threat or will banks have to embrace them? Either way, the fact remains that banks will no longer be able to ignore them. In some cases, crowdfunding is very successful, but in other aspects banks are still doing better. What could that teach us?
An important trend throughout society is the trend towards tailor-made products and services. Banks too will be expected to respond to this trend; that, after all, is what the customers want. In the future, banks will provide more and more tailor-made services, because technological innovations are making that concept increasingly easy to implement. This way, customers will receive the service that suits their situation. That’s what they pay for, after all.
So how does one do innovation? What does it take? One element that’s essentially indispensable to the process of innovating products and services is a creative team willing to come up with creative, unconventional solutions. In that situation, would you rather have a seasoned team set in its ways, or a young team that will look at the problem with fresh eyes?
Startups have changed how many sectors work. Working on a product for years before launching it is a thing of the past; nowadays you need to be more agile, and think in terms of much shorter throughput times. What risks are involved with creating the bank of the future? How many attempts can be allowed to fail in this pursuit? How do you recruit the right people, and how do you keep them? How can you combine innovation with lower budgets? What will the management of the bank of the future be like? And finally, startups: should you leave them be, cooperate with them, or buy them out?