6 Major US Retail Banking Trends

Today, retail banks are investing to leverage digital technology and also partnering with third-party providers to drive customer centricity and meet the competitive edge within an evolving banking system. The analysis chart showing the whole manipulations in the banking industry delineates the top trends being followed to manage retail banking. 

Artificial intelligence has also been notified to support banks’ effort to improving their customer onboarding and customer touchpoint processes. With time, banks are initiating to develop the thinking methodology to understand the customer journey and advance their experience. The main objective of following the banking trends is to assist the reader comprehend the fast-changing dynamic of the banking ecosystem effortlessly. 

Let’s have a look at the emerging trends in retail banking 

1. In the current time, mobile banking is on the Rise:

The deployment of mobile and other digital technology has increased to offer simple and streamlined low-cost banking services to customers. Let’s talk about the “Moven” the software providing feedback to customers about their daily spending through the mobile application. With the enhanced demand for mobile connectivity, banks following the traditional methodologies have also realized the importance of mobile and other digital platforms. Banks such as May bank and US banks are providing the facility of remote deposit capture to their customers. This has been developed to assist them to scan checks using their smartphones and deposit the amount without visiting a bank or ATM physically. 

2. Using Technology Innovations:

The day-to-day progress in technology is introducing possible innovations in the banking sector. The innovative application like Teller Assist interactive ATMs of Bank of America is offering the real-time video chat facility to customers. It allows customers to perform transactions by placing their driver’s license on a scanner attached to the ATM instead of an ATM card. Through this process, their identity is verified and also customers may speak to a teller in case, the special transaction is required. It might be such as the withdrawal of money in certain denominations. Initiatives for innovative technology are not only for customer’s convenience but also for developing a green ecosystem.  

3. Leveraging Data and Analytics:

Financial institutions have fully adopted updated technologies. Now they are using big data to perform various activities such as monitoring customer journey to realize attrition rates and purchase decisions, analyzing the lending credit risks and determining product pricing and profitability. Here taking an example, we talk about reports for KeyBank prepared by Forbes states that it has employed analytics to appraise its staffing requirements and optimize its branch footprint. Such a step taken by KeyBank has led to an annual savings of USD 35 million. The use of data and analytics has favored bank customers greatly in terms of receiving personalized offers and experiences. The survey of the previous year in retail banking has shown that around 66% of customers have considered personalized offers as a general attempt. Around 40% of customers felt it bothersome; this report is the analysis of opportunities that depends on personalization. 

4. Innovating New Business and Operating models:

BAI.org has stated that banks would comprise two kinds of branches in the upcoming days. The small one would be technology-heavy and light on staff and another would be with expensive infrastructure with full-service and large availability of employees. Organizations involved in testing the former business model of the banking industry have reported that banks can opt to utilize some other business models like uniting their front/back-office operations with other banks to lessen costs. They may follow the white label strategy to introduce non-traditional products in branches or online to amplify customer traffic.

5. Reinventing Fee Structures:

Banks have taken initiatives to reinvent fee structures after observing the current circumstances. They are working to optimize fee structures to ensure that their revenue exceeds the cost of serving customers. Here take an example, Build Your Own Checking Account’ model introduced by Union Bank is allowing customers to pay for extra services according to their requirements. Such an innovative model has ensured greater flexibility to customers and added source of income to banks. A Kurt Salmon white paper titled ‘Reinventing Retail Banking in the US’5 has set the pricing strategy based on analysis of current market maturity, market share, IT impact, bank commercial strategy and customer price perception. Such steps adopted by bankers will help them to line up their pricing strategy with the business goal. 

6. Deploying Automation Systems:

The adoption of an automated system is considered to be an effective factor to minimize the time for banking processes. Americanbanker.com has already stated that Golden Pacific Bancorp is approving loan requests through an automated platform. Article published on Mckinsey.com states that automation is crucially performing to create opportunities for retail banks. The upgrading in their IT department, banks have become able to generate an increase of more than 50% in employee productivity and customer service.

Conclusion:

Taking the above-mentioned trends into consideration, it would not be wrong be to conclude that Banks need to stay aware of methods they are applying to improve the customer’s experience and capitalize on technological advancements. Their adaptation with advanced digital technology will help them to achieve a dynamic business environment to thrive by leap and bounds.