38 Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s The move from one of the UK’s largest banking groups, Lloyds, is a prime example of how the industry is adapting to consumer trends and the shift to online banking. Statistics show that in 2007 around one-third of consumers used online banking. Today, more than 90% of consumers conduct most of their banking needs online. This shift in behaviour has gradually changed the industry, but it is clear that the future of the financial services industry is digital. However, the closure of bank branches has forced a seismic divide between those who prefer to bank online and those who don’t. It has also raised many questions about the readiness of our high-street banks when it comes to supporting this divide and future-proofing services. Amid these branch closures, how can banks ensure that they are supporting all customers, both online and via the high street? It’s true, not all consumers are willing or capable of making the digital change, and there will always be those who prefer to bank manually. As banks continue to accelerate their digital transformation, the closure of more high-street banks is inevitable. As a result, those who prefer to bank in person could be left in the dark when it comes to managing their finances. We’ve seen some banks providing hands-on support at their branches for those unable to access digital services at home. This approach has helped to improve accessibility and increased education around digital initiatives. It has also encouraged increasingly more people to embrace digital ways of banking. The industry and regulators are also focusing on introducing plans to support those who are less digitally experienced. What are some of the initiatives that the industry and regulators are putting in place to support those who prefer to continue banking via the high street? Recently, a pilot agreement was launched for banks to share services to support the local community and the future of cash. Large banks across the UK will assess local needs every time a branch closes. The assessment could recommend a shared branch opens, an ATM installed, or a Post Office is upgraded. Banks will commit to delivering whatever is recommended to support those customers who prefer to bank in person. What’s more, the Financial Conduct Authority has proposed that banks will have to provide a more detailed analysis to justify closing a branch. The FCA will also have the power to ensure local communities across the UK have access to cash and banks who don’t comply could face fines. This will make sure that in those areas where digital adoption is not common, access to physical services will remain a priority for banks. These are promising initiatives, but the industry must do all it can to ensure these initiatives are widespread. It must also continue to think outside the box, innovate and develop other initiatives aimed at those reluctant to embrace digital banking. “To truly digitise banks, they need to overcome these obstacles surrounding interoperability with a coreless banking model.”
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