Santander: The Future of Banking is Digital
The pivot banks are making to digital has been a bit slow, granted; banks have a lot of market to account for and not all of that market wants such a switch to happen. A new report sponsored by Santander and written by The Economist Intelligence Unit suggests that banking’s future is indeed digital.
The Santander / Economist study found that the always-changing demographics are beginning to favor the rise of millennials and Generation Z, which is, admittedly, something of an inevitability. These demographics have been largely raised on digital technology, and are not only familiar with it but are eager to see it put to use in more places.
Banks here are no different, and the study notes that either the necessary changes be made, or banks run the risk of becoming “dumb pipes,” with a potentially substantial loss of market. Interestingly, many of these results are common the world over, with even Europe and South America looking to make some changes in light of this.
Europe is facing an increasingly graying population, complete with stressed savings due to people living longer. That’s prompting banks to look in new directions to address the shortfalls. Additionally, Latin Americans have surprisingly little contact with formal banks and related services; just 52 percent actually deal with a formal bank on a regular basis.
Moreover, customer expectations are on the rise. Customers were found to want three things from a bank: trust, transparency, and time. Convenience is a major desire, but not at the cost of security. With 16 percent of millennials already identifying as being a victim of identity theft at one point, it’s clear that security will be vital going forward to preserve this market.
The study doesn’t seem to account for the unusual responses of Gen Z to this market; its odd preferences for cash and brick-and-mortar stores don’t seem mentioned much. The Santander / Economist report does have the right of it in one sense: with the millennials poised to be the dominant force in the economy—they’re approaching peak spending years, and some are already starting same—banking with a mobile face is going to be vital going forward. However, shuttering the brick-and-mortar branches may not be the best strategy all around thanks to the generation to follow.