The data: 65% of worldwide banking executives expect that the branch-based model will be “dead” within the next five years, according to survey data collected by The Economist Intelligence Unit (EIU) on behalf of Temenos. The result, compiled from interviews of 305 senior global banking executives, is 35% higher than four years ago.
The bigger picture: The new data feeds into branch penetration forecasts completed by Insider Intelligence for the UK, the US, and Canada. “Penetration” is defined as bank account holders ages 18+ who visit a bank, credit union, or brokerage branch at least once per year.
What’s the new strategy? As brick-and-mortar locations decline, 81% of the bankers surveyed by the EIU say that banks will seek to differentiate by customer experience, rather than by products. New technologies like the cloud, artificial intelligence (AI), and APIs are the tools that global banking executives plan to use to deliver superior customer experiences.
One technology they expect to play a prominent role in this shift is AI—81% of respondents think it will be the key differentiator between successful and failing banks. Chat or voice-based assistants that use natural language processing (NLP), and machine learning (ML) offer a more personalized customer experience. When a bank becomes an interface, rather than a place, AI will enable banks to deliver bespoke insights that underpin their budgeting, wealth management, or personal financial management solutions.