What a difference a decade makes! With the 2010s officially in the books, there's no denying that things have changed fairly dramatically over the past 10 years. Smartphones, which only started to gain traction in the early portion of the decade, are now just about everywhere. Digital technology and innovation have given Americans the ability to do just about anything via their handheld device, from ordering pizza to scheduling appointments to reviewing their checking accounts. The mobile revolution has fundamentally altered a litany of industries, as well as the career opportunities therein.
There may be no better example than retail banking. Due in part to the rise in alternative payment systems, such as mobile wallets, credit cards and digital devices, the traditional bank teller can no longer be classified as "traditional" and in fact may not be called a teller in your local branch. Because much of their work has historically been related to cash handling – a task that today is largely automated via cash recyclers and ATMs – tellers are trailing off in numbers. According to the U.S. Bureau of Labor Statistics, the average job growth rate among all professions between 2018 and 2028 is projected to be +5%. The teller forecast runs counter to that, however with the occupation projected to contract -12% over the same period.
AI, digital has altered the banking industry
Banking-related professions overall aren't quite what they used to be, which again is due to an uptick in AI and mobile device use. But what does this mean? Industry speculation and public perception is divided. A Wells Fargo study projects that robotics will result in 200,000 bank jobs being eliminated in the next 10 years, Bloomberg reported.
Michael Tang, digital transformation leader for the consulting firm Deloitte, told the news agency that the reliance on AI is already in the works, evidenced by the growth of ATMs and chatbots used to field questions by phone.
"The public is largely divided on whether AI will result in more jobs or fewer."
The growing utilization of AI raises the specter of full-scale replacement, something presidential candidates have warned in debates and interviews. This is a fear that some Americans share. According to analysis conducted by Gallup, the public is largely divided on whether AI will result in more jobs or fewer, as 47% believe their job is at risk of being cut within the next 20 years.
All this being said, a key question remains: What will a banking position look like 10 years, 20 years or 30 years in the future?
Banks run on people
One thing is just about certain – banks will always require actual human beings. People still visit their branches on a regular basis – even though visits have declined somewhat – and they still need advice on matters that automated substitutes simply cannot deliver, never mind garner the necessary consumer trust to be effective in doing so. A study done by J.D. Power and Associates found that 41% of retail bank customers actively seek out investment-related advice from banking professionals, slightly ahead of suggestions for how to improve their financial status and retirement recommendations, at 39% and 38%, respectively.
How effective banking professionals are in providing such advice is closely tied to the level of trust consumers ultimately place in their financial institution and the likelihood of remaining with them for the foreseeable future. Indeed, 86% of respondents who were highly satisfied with the advice they received said they "definitely will" go to the branch again for other product or money-related purposes.
"Successful banks are moving from a sales focus to an advice culture," said Paul Adam, senior director of banking at J.D. Power. "When that happens, there's a considerable increase in new account openings, trust and advocacy."
He cautioned, however, that because customer satisfaction is largely subjective, banks must be strategic and hire those individuals who are good at extending sound financial advice and customer relations.
"Digital banking has become its own entity."
Although Americans use brick-and-mortar branches as well as online banking, the digital aspect has grown so much that it's practically become its own entity. Banks are adapting to shifting consumer behaviors by creating positions that were rare in the 2000s and early 2010s. These include so-called "digital ambassadors." Major financial institutions like Wells Fargo and Bank of America employ digital ambassadors or concierges in branches to answer customers' questions on all things related to online banking and more, USA Today reported.
Digital disruption requires a human touch
Perhaps above all else, the future of modern banking is in providing human assistance, particularly in the digital realm. Just ask Chris Maher, CEO of OceanFirst Financial, one of many banks in the midst of refining their digital strategies.
"The first and most important learning we had is our people had to understand that their value to our customers was in helping them do things [electronically]," Maher told American Banker. These tasks, he added, included how to download products, navigate mobile apps or payment portals. Through ongoing training, the company "helped our employees take those skills that they needed to service the digital customer account."
The future is bright for the banking industry and poised for great things in the coming years. Whether you're working on putting together a digital strategy or are in the midst of branch transformation, BranchServ can provide the solutions you need to grow and adapt. For more information on what we can do for your FI, contact us today.