Branch banking could be dead by 2026, reports Temenos
Written by the Economist Intelligence Unit (EIU), ‘Branching Out: Can Banks Move From City Centers to Digital Ecosystems?’ is a study into the potential trajectory of banking following COVID-19.
Using a sample of over 300 senior industry executives from around the world, the report measures responses to several key trends, including the decline of the high street, the evolution of tech ecosystems, and next-gen customer experience (CX).
Some of the important takeaways are:
- 65% of bankers believe physical branches will be phased out (“dead) by 2026
- 80% consider a focus on CX for differentiation more important than products
- 47% expect tech ecosystems to gain prevalence in the next two years, forging partnerships between third parties engaged in banking and non-banking activities
- 66% of banks consider technology as the sector’s most prominent driver for change over the next four years
The pandemic: Causing a culture change
Although the gradual ubiquity of digital technology in banking was close to a certainty before the pandemic, the conditions imposed on customers around the world were perfect for accelerating its adoption.
With physical branches closed, banks had no choice but to develop their online platforms and customers had no option but to use them. Now, the convenience and enhanced functionality of these same platforms appears to carry a death sentence for branches even as global lockdowns begin to end.
Some banking executives, such as Aalishaan Zaidi, Global Head of Digital Banking at Standard Chartered, credits the pandemic as revitalising attitude and culture:
“The big shift for us was our belief that we could change fast if we really wanted to. [Prior to the pandemic] we would have never done the partnerships we are doing now.”
Enhancing the competition
Having to shift away from branches took most high street banks out of their comfort zone and handed an easy advantage to challenger banks, which, for the most part, offered customers a superior online or app-based experience through their dedication to digital.
Kanika Hope, Chief Strategy Officer at Temenos, argued that banks are now absorbing the lessons they can learn from competitors in Big Tech with the aim of revitalising their legacy business models.
“Many now aspire to develop digital ecosystems that bring more human, differentiated experiences to their customers using the power of cloud, SaaS and AI. [The new report] shows that bankers now understand that technology will be an enabler for these new business models and is critical to their competitive differentiation.”
Whether physical branches will be extinct in the next five years (or at all) remains unknown. Whatever the case, it seems clear that COVID-19 has, as with so many industries around the world, set banking on a new and exciting course.
Download Temenos' report here
Upgrade launch new credit card with bitcoin rewards
Upgrade, a fintech company focused on providing credit for mainstream consumers, has launched the Upgrade Bitcoin Rewards Card a new version of its Upgrade Card featuring bitcoin rewards. Under the new programme, users earn unlimited 1.5% bitcoin rewards on every purchase as they make payments.
The custody and trading platform for holding and selling bitcoin is provided by NYDIG and the card is a Visa Signature card, which includes benefits such as trip and baggage insurance, purchase protection, and extended warranty coverage.
The company offers credit lines from $500 to $25,000 with the Upgrade Bitcoin Rewards Card depending on your credit score. It works with Apple Pay and Google Pay. Like other Upgrade credit cards, there are no monthly fees, late fees, or returned payment fees.
"Upgrade Card is already delivering over $3 billion in annualised credit to consumers," said Renaud Laplanche, co-founder and CEO at Upgrade. "Starting today, anyone can apply for an Upgrade Bitcoin Rewards Card and enjoy the same affordable and responsible credit as with any Upgrade Card, plus the potential upside and fun of owning bitcoin."
Participating in the crypto economy
Upgrade isn’t the first company to announce a credit card with bitcoin rewards, but it’s the first one that is generally available. Anyone can apply with no waitlist, and start using their virtual card immediately until they get their physical card in the mail.
"Crypto rewards introduce cardholders to a new asset class that is increasingly part of a consumer's financial portfolio," said Terry Angelos, SVP and Global Head of Fintech at Visa. "Whether you're a crypto enthusiast or just getting started, programmes like the Upgrade Bitcoin Rewards Card offer an engaging and low-risk way to participate in the crypto economy."
At the moment, you can’t do much with your bitcoins. You can choose to hold them or sell them. There’s no way to transfer your bitcoins to another wallet for instance. If you choose to sell your rewards, there’s a 1.5% transaction fee.
This card is not currently available in all 50 states. Customers in Hawaii, Indiana, Iowa, Louisiana, Nebraska, Nevada, New Hampshire, North Carolina, Washington, West Virginia, Wisconsin, and the District of Columbia can’t order an Upgrade Bitcoin Rewards Card at the moment.