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“ They need the tech to keep costs down and deliver the service their market segment requires – which is both clicks and bricks – as well as quality staff to provide the advice that their customers want but increasingly feel unable to find because their existing bank is closing its branches and removing named account managers from all but the larger SMEs and large corporates .”
Critical for underserved communities Hans Tesselaar is the Executive Director at
BIAN ( Banking Industry Architecture Network ) – a collaborative , not-for-profit ecosystem formed of leading banks , technology providers , consultants and academics from all over the globe . He believes that , despite the speed at which global banking is developing , community banks have a vital role to play . In areas where digital adoption is not common , access to physical services remains a priority , Tesselaar says , pointing out that fintech and banks must continue to think outside of the box , innovate and develop other initiatives aimed at those reluctant to embrace digital banking alongside the role community banks will play .
“ Community banks will be critical in ensuring underserved communities have access to financial services as the popularity of digital banking grows . As fintechs and banks continue to accelerate their digital transformation in response to this , the closure of more high-street banks is making in-person banking inaccessible for many .”
Tesselaar outlines the importance of recognising that not all consumers are willing or capable of making the digital change , and there will always be those who prefer to bank manually . “ This is where community banks can provide hands-on support at branches for those unable to access digital services at home . Not only does this help to improve accessibility and increase education around digital initiatives , but it also encourages people to embrace digital ways of banking .”
Industry and regulators are , according to Tesselaar , prioritising community banking to provide for those who prefer to bank in person . “ A
pilot agreement has recently been launched for banks to share services to support the local community and the future of cash . If a banking provider is closing a branch , it must assess how the branch was used by the local community . The assessment could recommend a shared branch opens in the community , or that a Post Office be upgraded .
Tesselaar says , “ In addition to this , the UK ’ s
Financial Conduct Authority has the power to ensure local communities across the UK have access to cash and banks who don ’ t comply could face fines , demonstrating the need for community banks in certain areas .”
A challenging time But there are challenges involved in providing services as innovative and cutting edge as current fintechs and larger banks . The expense alone of transitioning to digital services has resulted in older community banks being sluggish to adopt new practices – which puts them behind the curve , in terms of customer expectations .
“ To provide a truly personalised experience that caters for all customers within the community , these banks must overcome obstacles surrounding interoperability ,” says Tesselaar “ A coreless banking model approach to transformation can empower banks to select software vendors needed to obtain the best-of-breed for each application area . By translating
96 September 2022