Twenty years ago, being “online” was a pretty new concept. Since then, the World Wide Web has evolved by leaps and bounds — as has the world of online savings. Today, you don’t need to step into an actual brick-and-mortar bank — or even up to an ATM — to see balances, transfer money between accounts or even make deposits. Now you can do all these tasks and more (such as make bill payments) through your computer or mobile device. In fact, online banks, such as Ally Bank, don’t even need physical locations to give you services that are equal to or better than what traditional banks have to offer.
But what will the banking landscape look like in another 20 years? What technologies have yet to come down the pike?
To get a picture of how banking may change in the future and near-future, the Straight Talk blog had a conversation with a team of Ally Bank experts who keep their fingers on the pulse of banking developments: Mike Pennella, strategy and design executive; Ann Bellinger, deposit product executive; and Carrie Sumlin, brand and digital deposits executive. Here’s how they envision banking in the next 20 years.
Banking Breakthroughs in the Last 20 Years
To understand where banking is going, it helps to look back at what a long way it’s come. Some 20 years ago, using an ATM still ruled as one of the biggest tech developments in banking. But now you don’t even have to go to an ATM. “I would say one of the biggest changes in the last 20 years has been online banking,” says Pennella. “And other than that, mobile banking.”
“Remote deposit allows you to do banking-on-the-go,” adds Bellinger. “It adds a significant amount of convenience for customers just to be able to bank by phone or by mobile, instead of always having to go into a branch.” Says Pennella, “Before, you had to find a branch and be close to a physical location. Mobile and online banking sort of freed the customer from those constraints.”
Besides freeing customers from the restrictions of place, remote banking also lets them bank on their own time. “Customers are no longer confined by the hours of the bank,” says Pennella. Adds Sumlin, “That allows the customer to have more of a choice in terms of who they bank with. Before they really had to bank with branches and banks that were physically close to them. And now their choices are pretty unlimited.”
Plus, explains Bellinger, the Internet allows for much easier comparison-shopping when it comes to choosing a bank. “Before, you had to go visit five banking centers and try to compare all the brochures,” she says. “Now everything’s online and integrators are comparing all the banks and products and fees for you, making it so much simpler.”
The Next 20 Years: Banking Technologies in the Works
“Technology changes are happening at a much more rapid pace than we’ve been used to,” says Pennella.
One such evolving technology, according to Pennella, is voice recognition. “This, combined with, probably, some artificial intelligence type technology, will allow customers to ask more complex questions of the bank and get answers in an automated fashion,” he explains. “Whereas today, you might have to call and ask a customer service representative questions about your account, you’ll be able to do that via interactive voice response as well — and not only through phone channels, but through computer channels.”
Pennella also cites Google Glass — which is basically Google in a pair of eyeglasses — as an example of an advancement that could bring significant change. Such new tech, “will free up customers even more in terms of what they can use when banking,” says Pennella. “Today you use a keyboard, whether it’s on a computer or a phone. Those things will probably become obsolete, as technologies such as voice recognition will sort of eliminate the need for those kinds of inputs.”
In fact, you may not even need to wait 20 years before all these new tools become available to you. “These things will probably happen in the next two to three years,” predicts Sumlin.
A Cashless Society?
Many have envisioned a future where the exchange of physical cash becomes a thing of the past — and our Ally experts agree that day is coming.
“I think the whole area of electronic transactions — cashless or paperless transactions — is ripe for change over the next 5, 10, 20 years,” says Pennella. “At some point, cash may become nearly obsolete.
Sumlin feels this may happen in less than 20 years, but thinks it’s more a question of how rather than when. “There’s a lot of discussion around what the standard will be for that type of application in the future,” Sumlin says. “For example, now, when you go to Starbucks, you use their app to pay for your coffee. You don’t want to be in an environment where every retailer creates their own app, requiring you to have 500 apps on your phone in order to pay for your goods. So what are the standards going to be for that? Who’s going to win that race? Is it going to be the card networks, like MasterCard and Visa? Is it going to be a company like Google? How’s all that going to play out? How do Square and others fit in?”
Pennella takes the imaginary scenario a step further: “Would people use their banks differently if we played out the cashless-transactions scenario? Banks may no longer play as big a role in terms of the checking account model, and would probably take on more of a savings and investment-advisory role.”
When it comes to the next 20 years, though, the bottom line is pretty simple, according to Pennella. “The future of banking is about eliminating the branch through a combination of video stations, phones and online.”
Which future banking technologies do you most look forward to? Can you imagine new ways of banking that no one else has thought of?