The Virtual Reality of Modern Banking

by Edward O'Brien 0

When most people think about traditional banking, they envision long lines leading up to the bank teller from their local brick-and-mortar bank.

Well, that style of banking maybe coming to a close. Modern banking can take place at home or on the go. Banking has become as simple as a tap or click of a button. Customers are now able to make deposits, create a loan and manage their accounts online.
Mike Brown, Arizona regional president of Washington Federal Bank, was astounded when he first learned mobile banking was possible.

“I saw an ad on the television and went ‘Wow, that’s pretty amazing,’” Brown recalls. “Now, everybody does it.”

Modern banks are looking at various avenues of banking to maximize profits. The old strategy banks utilized was putting branches in intersections that have a lot of traffic. In today’s banking world, the banking strategies have become more scientific. Many factors, such as demographics and specialization, are taken into account. No other style of banking has become more important than mobile and online banking. Banks are beginning to invest more on information technology than ever before just to keep up with the dramatic changes in the technology and banking world.

“What the next step is?” Brown asks. “Who knows? You’ve got to continually put money into IT just to be prepared for it.”

More banks are closing or amending their brick-and-mortar branches as online and mobile banking grows.

“Probably, the one I thing think about that has changed a lot is on the mobile deposit side, which saw a 49 percent increase (from March 2015 to March 2016),” says said Bankers Trust Arizona Market President Patricia F. Rouke. “That’s what is driving your branch traffic and that might be why, at least in our market, you’ve seen some banks close branches because they don’t have that walk-in traffic.”

With consumers’ insatiable appetite for all things mobile, it’s important that today’s financial institutions – and particularly small-to-midsized community banks and credit unions – are up to the task when offering digital banking solutions. And fortunately, many of the core and channels systems providers, as well as other firms, offer robust and cost-efficient online and mobile banking solutions that can be tailored to the needs of smaller institutions.

Overview by Ed O’Brien, Director, Banking Channels Advisory Service at Mercator Advisory Group

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