The Future Is Here: Digital Banking Communications in 2017 and Beyond
Consumer desire for digital, mobile interactions will surely create endless opportunities for new communication services.
The word "future" produces a variety of images for countless people. For some, the future is an apocalyptic wasteland mirroring recent popular dystopian novels; for others, the future is a digital revolution, equipped with technological innovations that allow the world to reach out further than ever imagined. While the latter seems more within the lines of the digital transformation that is already occurring, both fail to recognize that the future is already here -- revealed most noticeably in our daily communications.
Many industries around the world have evolved their uses of communications, but few have advanced as notably as banking. This industry's clear shift toward the digitization and virtualization of communications, despite the highly regulated market, is transforming the banking experience for consumers and representatives. And although immense progress has been made in the past decade, the ways in which consumers communicate with banking representatives will only continue to change in 2017 and beyond.
Decline of Branch Locations Increases Digital Communications
Shifting preferences from online to mobile communications, as well as continued consumer demands for convenience, have contributed to the recent decline in branch locations. For example, a strategy report from the National Credit Union Administration found that in 2015 1,614 branches closed -- bringing the U.S total down to 92,997 from its peak of 99,550 in 2009. Nonetheless, branch location services remain important for banking communications -- but just what those services look like is certain to keep changing. The Federal Reserve reported in its annual Consumers and Mobile Financial Services Report, for example, that financial consumers prefer to interact with their banks through multiple channels; the top four being online (65%), ATM (62%), mobile (54%), and branch teller (51%).
With the level of multichannel support available for consumer engagement today, bank communication services are stronger than ever and hold astounding potential for expansion in 2017. As banks continue to virtualize their services, consumers will have even more ways to interact with their banks -- promoting stronger communication around financial decisions. Additionally, as digital communications continue to saturate the banking industry, collaboration between banking representatives is increasing and creating more opportunities for an increased level of customer service as a result.
Simple Banking Transactions and Communications Continue to Shift to Mobile
As Millennials continue to represent one quarter of the nation's population, according to the U.S. Census Bureau, the preferences of these 83.1 million individuals are shifting banking communications to mobile. The Federal Reserve continues to report that mobile banking is on the rise: Forty three percent of all mobile phone owners with a bank account have used mobile banking in the past year, which is up from 33% in 2013. Now what consumers could have easily completed online just a year ago is often more conveniently done with the click of a button on a smartphone -- anywhere, anytime.
With this increased demand for mobile banking, the financial industry is finding more ways to engage and communicate with its consumers remotely. Trusted entities such as the Federal Deposit Insurance Corporation are reaching out to banks to drive opportunities for underserved mobile consumers through increased awareness of mobile tools, long-term financial management and improving access to timely account information -- all from a consumer's preferred mobile device.
Growing Improvements in Banking Security Strengthen Communications
As with any technological innovation that utilizes personal information, however, security risks will always pose a challenge. With mobile communications continuing their upswing trend in every industry, improvements in security are crucial to strengthening banking communications. This year, the Federal Reserve's Consumers and Mobile Financial Services Report found that 73% of consumers were concerned about the security of mobile banking. Fortunately, 2017 will see its share of banking security enhancements that will create stronger opportunities for digital banking communications.
In the coming year, awareness of certain safeguards that consumers can take to protect their information is likely to become even more widespread. The Federal Reserve highlights that in 2016, the most common precautions consumers took to protect their financial information were installing updates (84%), password-protecting their phones (70%) and customizing privacy settings (58%). Banking industries are rethinking mandatory password changes to further protect consumer information. For example, the Federal Trade Commission reported that in a University of North Carolina study, 60% of passwords could be cracked using password histories and cracking tools -- which suggests that after a mandated password change, attackers may be able to guess the user's new password more easily from previously learned passwords. As a result, despite previous industry thought that regular password changes increase security, the opposite might actually be true. This year is likely to see even more "security best practices" change in light of the latest technology.
Overall, the innovations discussed earlier make one thing clear: Digital banking communications have a bright future in 2017 and beyond. As the desire for convenient, fast-paced mobile communications continues to rise in importance for consumer demands, such innovations are sure to remain pertinent and well-utilized within the industry. Additionally, the wide variety of channels through which consumers can interact with banks digitally will surely create an endless amount of opportunities for communications to continue to advance and meet burgeoning needs.