Retail Banks in 2024: Embracing Digital Hubs & Cybersecurity, Transforming Customer Experience
The year 2024 is predicted to bring significant changes and challenges for retail banks. It is hoped that banks will adopt a more ambitious approach to digital self-service banking, rather than simply reducing their branch and ATM networks, which can harm customers.
In certain markets, like the U.K., there has been an increase in regulatory pressure to slow down or halt branch closure programs. The shared hub concept has emerged as a potential solution for communities affected by the loss of their last bank branch or free ATMs. However, the implementation of these shared hubs has been relatively slow. In 2024, there needs to be an acceleration of these schemes or a reconsideration of alternative approaches. It is crucial to harness the power of in-branch digital technologies to ensure that these hubs are more than just temporary setups aimed at convincing vulnerable or undecided customers to sign up for online banking. In other words, a new version of the shared banking hub, known as shared banking hub 2.0, may become a reality in 2024.
Ambitious steps need to be taken by banks in 2024 to embrace a new generation of digital self-service hubs. These hubs can offer improved access to services, generate operational savings, and help keep branches open. The hybrid model of merging advanced self-service terminals with human assistance, supported by video links to central pools of specialist advisers on loans, mortgages, and other products and services, could be the future of retail bank branches. This approach provides customers with the autonomy of self-service while ensuring expert guidance in a secure space. Additionally, this model can streamline operations and uncover new revenue streams as branches evolve into multifunctional spaces.
While generative AI made headlines in 2023, it is expected to have an even greater impact in 2024. Other forms of AI focused on automating processes and machine learning will also continue to revolutionize digital self-service solutions, offering better customer experiences and operational efficiencies. These advancements will be seen in customer interfaces, such as integrated chatbots within ATMs and ASSTs (Assisted Self-Service Terminals), as well as in predictive analytics for cash management and ATM maintenance.
The year 2023 witnessed a rise in both physical and cyber-attacks on ATMs, including cases of jackpotting fraud. To protect customers, it is essential for 2024 to witness a broader adoption of sophisticated cybersecurity strategies like Zero Trust and micro-segmentation. As retail banks and ATM operators invest in new self-service channels, they must also invest in resources and processes to incorporate modern cybersecurity practices into the self-service banking infrastructure. This is crucial to prevent cyber-attacks and fraud.
Macro trends such as changing customer behavior and inflation’s impact on spending are expected to persist in 2024. This unrelenting pressure will push banks and other institutions toward more cooperative relationships that maintain quality services while reducing operational costs. Examples of these relationships may include banks pooling ATMs on a national scale, branch sharing, or partnerships between neo banks and legacy banks.
In the face of these changes, banks and ATM operators must embrace positive transformation in 2024. Most institutions are striving for the right balance between providing superior customer experiences across all channels and achieving greater operational efficiencies, security, and agility.
2024 has the potential to be a momentous year for everyone involved. By seizing opportunities, adopting innovative approaches, and focusing on customer needs, retail banks can navigate the challenges ahead and enhance the overall banking experience for their customers.
