The banking system is adrift. The online banking models are taking over from the traditional banking models. In this post, we demonstrate how online banking is fast taking over from the traditional banking models.
Most banks are closing their conventional branches
Though traditional banking system had taken roots so much in history, online banking is making inroads rather fast. The shift to online banking is evident from the massive closure of conventional bank branches.
Some of the top banks that have closed their branches in the last 6 years include Citibank, Bank of American Corp, JP Morgan Chase & Co and TCF Financial Corp. They are finding it extra difficult to maintain branches because of many regulations for running such branches and declining profitability.
Alternative banking options
Even as banks close branches, they do not want to lose sight of the target clients. Therefore, they go for alternative banking options that ensure users can connect with the bank, access their funds, check balances, seek help, and feel satisfied all the time. The financial institutions have opted for ATMs and mobile banking.
To provide an additional layer of security, banks are using chip cards to replace the traditional credit cards. The Chip Cards have a special microchip that makes copying and fraud very difficult. Clients are likely to use these chip cards more as more traders acquire the right software that accepts then new payment methods.
Note that though online banking is targeted at bringing extra convenience to client’s lives, an extra charge could be levied for such services. For example, a fee might be levied for remotely checking the deposits. Besides, the ease of online banking compared to the conventional model could result in the increased number of clients.
The innovation in the banking niche
The moment the banking sector showed the desire to go the industry was thrown into a frenzy trying to craft innovation to make things work. These technologies are now acting as stepping stones for progressive development. Here are some of these innovations you should know about.
- IBeacon is used by some banks to provide customers with personalized information such as targeted messages and product information.
- Facial recognition software is applied to identify clients entering bank branches.
- Augmented reality technology has been adopted by some banks to increase customer’s use of the bank’s services and products.
- Application innovation banking services such as Apple Pay are allowing clients to make in-store and online purchases.
- Mobile applications are now making clients to easily ‘carry the entire bank’ in their hands. They can make inquiries, pay for goods, check balances, and even get loans.