Human-less banking

Imagine a world where banks no longer need employees. Retail branches are scarce and large office buildings are empty. Banking is entirely automated, mobile, virtual, and hosted in the cloud. The hundreds of thousands of people who spent years working in banking have all been made redundant.

Well guess what? You can stop imagining. This will soon be our reality.

The bank of the future

Depositing and transferring money from your mobile device already exists. Applying for loans, paying bills, purchasing stocks, planning for retirement, and other financial services can be done without human assistance. Conversational, AI-powered chatbots are rapidly evolving. In fact, they nearly rival  humans in customer service ability. With this in mind, and given that banks do not offer physical products except paper checks and cards, we argue that the bank of the future will look a lot less like branches and a lot more like your typical smartphone app.

With this in mind, and given that banks do not offer physical products except paper checks and cards, we argue that the bank of the future will look a lot less like branches and a lot more like your typical smartphone app.

For many, this statement won’t be surprising. Any bank can automate practically all of their business. On the front end, this is as easy as seeking out new customers via automated marketing that utilizes existing data, surveys, and publicly available information on potential clients. Lending is nothing more than a decision on credit worthiness based upon an electronic collection of data paperwork from customers and the results of mathematical algorithms. The automation already exists, the only step left is building and implementing the technology.

Anyone who is skeptical need only look at examples like MakerDAO, a fully automated and decentralized cryptocurrency lending exchange, and Ethereum, who provide automated financial agreements via smart contracts.

The age of automation

This new age of banking is favorable for all. Automating the products and operating functions of a bank will contribute to improved efficiency and effectiveness. These functions include clearing checks, making a money transfer, performing KYC functions, and monitoring fraud.

The bank’s themselves will benefit from technological innovation. Bank shareholders will see operating costs reduce significantly and will subsequently get better returns. Consumers will benefit as they experience the management of their finances becoming entirely intuitive and seamless. Services will be faster, loan approvals will be instant, and information will be more visible. Customers will be able to make smarter financial decisions. Naturally this will all be encompassed in the slickest of apps. Full-scale operational automation will make this future possible. 

This confluence of technologies enables a 24/7, 365, human-free, digital bank.

The role of data

Data makes this future not just possible, but highly likely. Algorithms have the ability to take full charge of our financial management, with data collected during every client-bank interaction on top of globally available information streams. As client-bank interactions scale and data continuously accumulates, banking software will become ever more intuitive at matching products to a customer’s needs. Cash App, Coinbase, Envel and several other financial services apps already leverage this technology.

Banking will be simultaneously depersonalized via the removal of human employees and personalized via the processing of vast pools of client data and interactions.

This is highly beneficial for banks, who already recognize the technological gains and cost reductions that this automation brings.

Are you ready for human-free banking?

Banks must prepare for the next generation of financial services by considering these questions:

1. Existential Level: Will this trend threaten or enhance the existence of your bank?  
2. Strategic Level: Will you adopt a more piecemeal strategy, choosing to automate certain activities that might be low-hanging fruit? Or will you automate more widely just to keep up?
3. Tactical Level: Will you buy this automation from the market or build it yourself? 

We know that the ideas outlined in this article are a clear and achievable reality. How? Because we are currently helping several forward-looking banks design, build, and act on this vision.

Humans are not needed to run a bank, with the exception, perhaps, of leaders with a vision to provide a seamless banking experience and the courage to take the bold action required to achieve it.