Future of banking for my grandchildren

What will probably emerge would be digitally enabled branch-lite versions located in malls and populated with desktops, laptops arrayed on tables for the customers’ use

Writing my fintech articles the past few weeks has provided yours truly, a senior citizen with a better than average understanding of how financial systems work, but still largely ignorant about the advances in financial technology, a glimpse of how the future of banking in our country could probably look like for my grandchildren. I am referring particularly to the transformation and eventual disappearance of the traditional full-service branch banking model of brick-and-mortar branches situated in widespread locations to provide retail customers the convenience and ease of access to their nearest friendly banker to make withdrawals, fund transfers, deposits, purchase marketable securities, buy insurance and to borrow money. What will probably emerge would be digitally enabled branch-lite versions located in malls and populated with desktops, laptops arrayed on tables for the customers’ use, very similar to an Apple computer store look-and-feel.

I also imagine that there will be limited onsite banking services except for a few customer relationship personnel still providing an option for face-to-face interaction for those in need of assistance to navigate the proper use of the various online services available. ATMs will be strategically positioned within and outside the digital branch premises to cater to cash withdrawals from the bank, as well from the electronic wallets of various third-party fintech service providers who are digitally interconnected with the bank’s mainframe operating systems.

Other than the traditional deposit and withdrawal services, with the aid of customer relationship assistants in these digital branches, or in the comfort of the customers’ residences and offices, clients will be able to access via the bank’s online platform a host of other types of mundane transactions that would usually require some personal interaction and cash handling. With real-time access to our bank accounts, with the click of a mouse on a keyboard or the scanning of digital codes in our smartphones and laptops, we will be able to virtually buy a plane ticket, book and deposit for a hotel reservation or a pre-set meal in a five-star restaurant or in a fast-food counter, pay utility bills, purchase merchandise and food from online stores and groceries, etc. These could very well be scenes that we see of a utopian-like technologically advanced but highly authoritarian country like China where, if we are to believe the video clips that are being circulated on the Internet, this is their current reality, which for us is very much still a dream. But some of the more common retail activities such as online purchases, digital fund transfers and the like are already very much in use here, particularly among the millennials and those in the middle to upper income brackets. The greater majority, however, of the Filipinos continue to be unbanked, financially excluded and digitally disconnected. This is, of course, a function of how the macroeconomic fundamentals of the country, because unquestionably, the convenience of technology is of no use to one who is more concerned with where his next meal will come from. Without money, who needs a bank account, much less a digitally enabled electronic wallet that will require an electronic tablet or a smartphone and internet connectivity?

I am somewhat comforted by the highly visible moves of the NEDA and the Bangko Sentral ng Pilipinas in leading the charge for the digitization of our economy.

Prior to the Covid pandemic, the National Economic Development Authority (NEDA) had originally forecasted that the Philippines would be considered an upper-middle income country with a gross national income per capita of at least $4,046 by 2022. Unfortunately, the pandemic has indisputably set us back a few years and together with it our aspiration to become a highly digitized nation. As to what extent, we really still don’t know as the jury is still out if indeed, we will have a merry Christmas by December, as boldly predicted by Vaccine Czar Secretary Carlito Galvez.

But nevertheless, whatever the future might hold for us, I am somewhat comforted by the highly visible moves of the NEDA and the Bangko Sentral ng Pilipinas in leading the charge for the digitization of our economy through their respective push for the speedy implementation of the National Identification Systems Act and the Open Banking Strategy regulatory sandbox approach, twin prerequisites for a digitized Philippines.

After all, there is nothing wrong with dreaming, right?

Until next week… One big fight!

For comments, email bing_matoto@yahoo.com.