Clinton Cheng, VP, global head of the Visa/PLUS ATM Network at Visa, will deliver key insights regarding the future of self-service banking and payments at the Bank Customer Experience Summit, being held in Chicago from Aug. 31 to Sept. 1.
The banking world is undergoing a massive shift, as banks continually switch over traditional services to digital venues. Banks are having to ask the question: how many branch services can or should we turn digital?
Last year, banks significantly cut down on branches, according to a CNBC report. In the U.S., banks closed a total of 2,927 branches. Worldwide, banks closed almost 4,000 branches and opened 1,000. Wells Fargo closed the most branch of anyone, at a total of 267 branches.
“We anticipate that the downward trend in branches will continue for a number of years as more of the transaction-orientated aspects of banking are done digitally,” Gerard Cassidy, head of U.S. bank equity strategy at RBC Capital Markets, told CNBC.
One reason for the closures is consolidation, as mergers and acquisitions hit $77 billion in 2021 — the highest since 2006.
“As consolidation continues and there are overlapping branches when deals are approved, there’s no need to have two branches on Main Street,” Cassidy said in the CNBC report.
In light of this shift, banks are also beginning to ask what role the ATM will play in this world, along with all their other payments and commerce tools. Should banks reduce their overall number of ATMs, or add different features to make them relevant for a chancing market? On another level, how can banks keep up with consumer demands for more advanced banking solutions?
Cheng will discuss how customers now expect far more from their financial institutions than in the past. Consumers want their banks to act more like the top technology brands that can handle all of their digital needs.
“The shift to digital in commerce, payments and banking is accelerating like never before,” Cheng said in an email interview.
This shift can be seen in the dramatic growth of fintech companies in recent years. The fintech market itself is expected to grow at a compound annual growth rate of 19.8% from 2022 to 2028, according to a report by Vantage Market Research. The report expects the finech market, which was worth $112.5 billion in 2021, to reach $332.5 billion by 2028.
The other issue at play here with ATMs is the cost of ATMs, since banks and financial institutions have to pay for the initial deployment, as well as armored cars to collect the cash from the ATMs with dedicated technicians. There is also the matter of repairs to consider, as ATMs can break down for a variety of reasons, some simple others complex and that too takes time and money to fix.
In light of all these challenges, Cheng said he plans to answer the question of whether the ATM can evolve to meet changing technology and consumer expectations during his keynote.
“For both traditional and digital first Issuers, building out a proprietary ATM footprint is capital intensive and operating an ATM fleet is costly (i.e., rent, armored cars, repairs, etc.),” Cheng said. “Additionally, many Visa clients are going through branch transformation and looking for more cost-effective ways to serve their customers’ everyday banking needs. Is there an ideal utility model that could provide benefits to all parties in the ecosystem?”
You can learn the answers to these dilemmas and many more issues in banking by registering for the Bank Customer Experience Summit here. Use the code AMCEDIT20 at checkout for 20% off.
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