IT 
ES 
To say that 2020 has been eventful would be an understatement. No one could have predicted how these last 12 months would pan out and how big an impact the coronavirus pandemic would have on the whole economy and specifically on the financial sector.
Looking at what the banking industry has in store for this year is how you can be prepared for any situations that arise. However, for banks to do this, they will have to reflect on the current state of the industry.
With that being said, we want to kick off this new year with a list of 2021 banking trends, which we believe will impact the industry in the upcoming months.
1. Sharing ATM infrastructure
Sharing ATM infrastructures is one trend that will continue to rise during this year, especially since it is a trend that is already present in some European markets.
For example, in Belgium a new initiative called Batopin has emerged to run a new ATM network for Belgium’s four biggest banks aiming at providing 95% of Belgians access to a modern ATM service within five kilometres of their home or business.
This trend will certainly continue to expand, especially with the challenges of owning ATM and branch estates, during a time where banking is more accessible and competitive than ever.
Because of this, many banks will also aim to reduce the costs used in banking industry through technology-led investments, cloud migration, and pooling infrastructure.
While these methods don’t always result in reduced costs, the overall goal of these actions are to maintaining access and improving customer experience.
2. Cashback for everyone
Cashback is when customers receive money back on their purchases from a business.
Receiving cashback without having to actually buy something in a store offers a remedy to the problem with access to cash. The UK government for example, has outlined a plan for customers to receive cashback from retail shops, without needing to buy anything.
This approach may be one of the adequate answers for remote rural communities which struggle to access to cash and find ATMs in their area. There are opportunities to develop this feature with more safety for customers, as it can have both online and offline modes with managed limited amounts on the customer accounts, providing tighter security.
Yet, the roll out of this service does face challenges. It may be too difficult for supermarkets and smaller convenience businesses to implement, and the current pandemic has left a devastating impact on them already. It’s also predicated on these businesses having access to cash themselves.
That said, it is important not to fall into the trap of shifting the burden onto small businesses. They are already under their own pressure because of changing consumer behaviours and, of course, the pandemic.
The benefits to the retailer should be more footfall and lower costs of cash handling. Small stores full of consumers only wanting access to cash for which the retailer cannot charge is an outcome that will not help revive communities.
3. Community-led initiatives and remote banking
Another banking trend that will continue in 2021 is the branch closures, but we will begin to see more community-led initiatives emerge as a resolution to the lack of access to cash.
The LINK delivery fund for example, allows communities to request a new ATM in their desired area. The next generation of bank branches, however, will need to be automated, cost–effective, smaller, and available 24/7.
This gives banks the ability to receive more deposits, get more gains and increase footfall, when comparing them to legacy branches. Ultimately, banks would be cheaper to operate if transactions were overseen by personnel during the day and remote teller assistants during the night.
Customers may transition over to other companies if banks are not careful, so to avoid this, they’ll need to implement remote, around the clock banks in these communities, if they want to see legacy branches remain in business.
If banks do not produce lean, smart, remote, around-the-clock branches, somebody else will – whether it be community-based or even independent ATM deployers – the principle of white labels is absolutely part of this new future. If this model is adopted, then in future it is also possible that we will see branch sharing.
Last, but not least, as customer experience is central to any business model, banks must have a good channel mix: a first in and first out channel policy is rarely the best option for attracting new and keeping existing customers because banks need to evaluate each one and see its value to customers and provide choice.
Older channels, such as tele-banking, should not be the first to disappear, and there may well be a revival alongside video-banking in the new 24-hour branch model.
4. Cybersecurity with a holistic approach
The number of cyber-attacks on banks will continue to rise in 2021.
This affects not only digital banking channels used for transactions, but also ATMs. These are often the biggest vulnerability in a bank’s IT security infrastructure due to outdated hardware and software.
With the increasing prevalence of home office and teleworking, bank employees only have access to their banking systems through remote access. This area also reveals weaknesses that can be exploited by cyber criminals. Special cybersecurity solutions on employees’ computers will be unavoidable.
In addition, on the way to becoming a NextGenBranch, financial institutions will have to protect themselves even more from cyber-attacks. For example, assisted self-service devices – which are fully owned and secured by a financial institution – will be the interface between the customer and the bank in the bank of the future.
These devices must be sufficiently secured in order to gain the trust of customers. The security aspect may become an important differentiator against other channels such as online or mobile, which the customer is also responsible for protecting.
Financial institutions will have to look more intensively at cyber security and corresponding solutions this year and actively work to ensure that both their customers’ personal data and their systems are protected.
Monitoring the emerging trends in 2021
The COVID-19 pandemic has resulted in banks providing a better customer banking experience by refining the quality of their financial services.
Despite the closure of bank branches, the aforementioned trends for the new year show that banks will constantly be looking for solutions that solve this problem.
While we have shared some of our predictions for the banking industry, we are constantly monitoring the industry landscape for emerging trends and hot topics – we will reflect on these predictions later on in 2021 to see how they have evolved.
So make sure you’re on the lookout!
