The news last week that ScotiaBank will establish its fourth Caribbean Region Digital Bank in the Grand Cayman is a great example of what banking will look like in the future. We applaud the embracing of technology by any business and as a major Banking Centre it is only fitting that local banks move in the direction of digital banking.
According to Business Insider, banking is a rapidly changing industry, and the biggest paradigm shift that has occurred is the move to digital-only banks.
Millennials, in particular, are moving more frequently toward digital banking. And as a result, they’re walking into their banks’ traditional brick-and-mortar branches less often than ever before.
This generation represents the greatest share of the U.S. population at 26% and the employed population at 34%, so it’s clear that their behaviors and preferences will have a profound effect on the future of the banking industry, particularly with regard to the way banks interact with their customers.
This shift to digital banking has come in many forms. Traditional powers such as Bank of America, JPMorgan Chase, Wells Fargo, and more have released mobile banking apps to let customers manage their accounts from their smartphones. And some startups have taken this approach one step further by creating digital-only banks that completely remove the need for a physical branch.
We foresee the reduction in cash transactions, particularly check cashing and customers will now understand that fees for cashing cheques is not only to raise revenue but more so to discourage in Branch transactions when the option of ATM transactions are readily available.
Also the use of debit cards for all transactions will not only reduce cash circulation in the economy but will reduce criminal activity related to the temptation from cash.
However, the personal touch demanded by customers can never be replaced and banks that seek to replace total front-line staff with technology should reconsider this move as the nature of Island banking is closely related to the level of personal interactivity between customer and employee.