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Beyond the Branch: Innovations in Retail Banking and Their Impact on Personal Finances

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Over the last couple of years, we’ve seen many new innovations in the banking industry. The biggest change in the banking sector and personal finance is the digitalization of banks.

Nowadays, people rarely go to the bank just because they can do just about anything from their mobile app. Whether it is getting a new credit card, applying for a loan, managing your portfolio, or exchanging between different currencies, most banking apps can do it all.

However the digitalization of retail banking opened up Pandora’s box for innovations, and we’ve seen many new trends that are designed to make managing your personal finance easier than ever before.

This inspired us to take a look at some of the top banking innovations that will impact the way we handle our personal finances.

Mobile Banking and Apps

As we mentioned before, the digitalization of the banking sector brought many new things to the table. Nowadays, almost any modern bank already has a mobile app that will help you manage your finances remotely.

At the moment it seems like the retail banking sector has brought more innovations in the field of banking apps compared to corporate banks. Read about the differences here.

However, these apps are just the start of it. At first mobile banking apps were quite limited. They allowed you to observe your finances, and that was about it. Nowadays, however, you can do just about anything with your mobile bank app.

The biggest innovation in this sector at the moment is the personalization of your banking experience. Banks are trying to incorporate AI, which is able to track your spending habits, offer you insights tips, and be your personal accountant.

The Rise of Chatbots

Remember the days when you had to call a weird number to reach the bank, wait on hold for eternity listening to some “fun” tunes, and hoping that someone would answer the call? Yes, those days are gone.

Nowadays, banks are incorporating AI chatbots that are capable of answering all your questions. These digital helpers are available round the clock to answer your burning questions, like “Did I really spend that much on coffee last month?” 

Some of these chatbots are like having a financial planner in your pocket, offering advice on how to save for that dream vacation, or how to start investing.

With a chatbot as your financial sidekick, saving money might just become the next trend. Who knew a conversation with a bot could inspire you to finally start that emergency fund?

More Personalization Through Tapping Into the Culture

Banks have a goal to connect with their customers on a much deeper level. In other words, they would like to make a persona out of you with all your interests and give you a more personalized banking experience.

For example, Wisconsin-based Associated Bank provides its clients with a range of sports-related experiences, including debit cards featuring different state teams, 2-for-1 baseball tickets, and club retail discounts. In close proximity to the Green Bay Packers’ home stadium, the bank even established a branch with an emphasis on the team.

Some apps also have full interactive experiences, where you can create your avatar, play a number of games, share your interests, and get more personalized deals.

It seems like banking apps are converting to social media platforms, where you can share your experiences and also manage your finances.

Collaborations With 3rd Party Providers

Banks are also more open to new collaborations. This opens up many new opportunities for innovations in the banking sector. The idea is quite simple, instead of spending tons of money and time on developing new apps or software that will improve the banking app, they partner with 3rd party providers that already offer such a thing.

For example, banks can partner with personal accounting software companies like Tiller or Sheetgo, where you can choose to share your spending, and they will track everything that is going on with your portfolio and give you an easy-to-understand summary at the end of the month.

But this is just the beginning, we expect many new partnerships in the next couple of years, with providers from different industries.

The only drawback to this model is the safety of data since it is hard to control what 3rd party members do with all your information.

Blockchain Technology

Even though most banks don’t like the existence of blockchain or crypto (at least publicly), they can definitely understand its impact on the financial industry. Some banks are more open to new blockchain technologies which will bring their decentralized nature to improve their current services.

Blockchain can enhance security, and also help in the world of authentication of digital goods and services.

Final Words

These are some of the innovations in the banking industry that will definitely impact how we handle our personal finances. It is a strange world we live in, where innovations come very quickly.

The best thing is that personal banking will be much easier than ever before.

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