Banks of the Future: Banks With No Branch

What will the banks of the future look like?

People are using ATMs, phone banking, direct deposit and the Internet more than ever to get their banking done, quickly and efficiently. In fact, did you know that Australians used ATMs 66 million times in January 2010. This is nearly double the amount from 10 years ago. The Nielsen Online Internet and Technology report states that most Australians over the age of 16 spend approximately 16 hours per week on the Internet. It’s been verified that the trend is moving away from face-to-face banking. Branchless banking is on the rise.

Do We Even Need Branches Anymore?

A Hitwise current study showed that banking is the most common used Internet site, and that the four biggest banks, have the top places in the Hitwise Business and Financial Institutions banking categories.  The biggest being Central Bank of Australia (CBA) – with its NetBank ranking higher than CBA, and it is the most visited and popular banking website in Australia.  Coming in close are the Australia and New Zealand Banking Group, National Australia Bank and Westpac and Australia’s First Bank.  The other banks that are prominent in the Internet most visited sites are St. George, ING Direct and Bendigo Bank.

In another survey of Australian Internet users, conducted by Centre for International Economics revealed that nearly fifty percent of people asked, used only online banking.  Most people saying that they would continue to do so.  Mostly, the convenience of doing everything in a keystroke or two, and having access to their accounts 24 hours a day was most appealing.

Most transactions can be done online, at the ATM or on the telephone, so why get in the car and drive to a branch, when computers and phones are so much more convenient. If you are comfortable with electronic banking and these other options, your choices are much more diverse in banks that are smaller such as credit unions and local small banks. You may even choose to bank with an online bank that offers absolutely no branches at all, as sometimes these banks offer better services.

Branchless Banking Saves Money:

Like most credit card companies who do not have access to the public, in offices and customer service centers, which is, by the way, all done telephonically, when banks save money on the overhead of keeping branches open, hired help, etc., they are able to offer better rates and products. When you choose an online bank, you will have access to lower interest loans or better rates on savings accounts. Also, many banks are charging fees to their customers for coming in for services that are done within the branch itself.  Online banking definitely has its plusses, and they can save you money.

Drawbacks:

First, since it appears that this is the future trend of banking, it may pose a bit inconvenient for the older folks who just want to give their money to a teller, face to face, and who find online banking a bit unnerving, especially if they are not computer savvy.  There will still be branches available to them, however limited, in the future though.

Security:

Some other drawbacks are the possible security issues.  Although, when you really think about it, all of your personal information, down to personal numbers and other critical information, is already on file with your bank.  The only difference is that it will become electronic, instead of paper – which leaves your information out there to hackers and scammers.

Even though banks are some of the most secure sites you will find on the Internet, there are many third party transactions that are performed in online banking transactions. Bill Payments, transfers to other savings and investment accounts and loan payments are a few.  Most of the protection/security banking sites offer are password authentication.  Most banks also now offer the banking keys, which must be verified to enter your account information.

Firewalls, data protection, encryption, as well as monitoring and notifications are all part of banking security.  When something unusual or suspicious shows up in your account, a lock out usually occurs until the transaction is verified.

So, all in all, the chances are pretty slim that your accounts will be compromised.  And who can argue with better services, less fees and handling your finances via keystroke?

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