Will Virtual Bank Branches Only Provide Banking Services in the Future?
Digital banking is developing rapidly. Perhaps by the end of the next 10 years, there may be no need for the bank branches we often see on the streets today!
Artificial intelligence refers to systems or machines that can perceive, analyze, problem-solve, learn, decide, infer and continuously modify themselves according to the information they collect. It is understood that in the near future, if not today, a large part of the labor force in working life will be fulfilled by artificial intelligence-based systems. In this context, the aim is for artificial intelligence technologies to think exactly like humans and solve the most complex problems like a human. Although it is not possible for artificial intelligence-based systems to completely replace humans, it is known that they can increase human success and potential, make our lives easier, and make it possible to do more work with less labor.
In the past, the concept of artificial intelligence was only associated with the field of engineering. Over time, it has been seen that artificial intelligence applications can be used in many fields with digital transformation and technological developments. For this reason, the "Banking and Finance" sector has also become an area open to artificial intelligence. According to calculations, the Artificial Intelligence Banks of the future have the potential to create an additional benefit of 1 trillion dollars for banks every year. This expected potential and the ongoing transformation process encourage banks to invest in AI and develop their business models with a focus on AI. For banks, AI applications are used in areas such as obtaining market information, increasing communication easily, and making banking services more accessible to customers. Perhaps by the end of the next 10 years, there may be no need for the bank branches we often see on the streets today! Even today, the interest in digital banking, which allows banking transactions to be done at any time of the day and from anywhere, without being bound by the concept of working hours, is increasing day by day. Digitalization, which we encounter in every aspect of our lives, is also gaining an important place in the banking sector. Especially in the world that is becoming increasingly digitalized with the pandemic, the use of mobile and digital banking has inevitably increased. According to researches, the rate of mobile and internet banking users is increasing day by day in our country.
Meanwhile, banks are now able to acquire customers without going to a branch. Consumers can become a customer of a bank they have never been a customer of before from where they sit, via their mobile phones. According to the changing banking legislation, it is now possible to become a customer in minutes via mobile phone without physically visiting the banks. In parallel with all these developments, while the number of branches of banks is decreasing, the number of people who are almost certain that banking will become completely digital and branchless in the medium term is increasing. According to the latest research, it is known that the number of customers making remote applications is around 836 thousand and the number of closed bank branches is around 1,000. The latest statistical information on the subject is as follows.
The total number of active digital banking customers in Turkey increased by 18 million 503 thousand people in the April-June 2023 period compared to the previous year and reached 103 million 634 thousand people. While 2 million 9 thousand of these users made "only internet banking" transactions, 91 million 351 thousand of them stated that they made "only mobile banking" transactions. The number of users performing both internet and mobile banking transactions was 10 million 274 thousand. Five years ago, the number of active digital banking customers was around 39 million. In the distribution of active retail digital banking customers by age groups in the April-June 2023 period, the 36-55 age group ranked first with 40 million people. This was followed by the 26-35 age group with 27 million people and the 18-25 age group with 19 million people. The total number of customers using digital banking services is already high, but the real revolution in banking has been in remote customer acquisition. The era of waiting in branches and signing pages of paper is coming to an end.
In the medium term, I believe that we are close to seeing a complete change in banking and that almost all banks will have very few, if any, branches at all. One of the highest expense items of banks is the rents of actual branches, personnel and operating expenses. The expectation from the banking sector, which is digitalizing day by day, is that they will close branches, carry out banking transactions through virtual branches, offer users the option to use loans with lower interest rates and provide banking services at a cheaper price with the savings to be obtained from the closure of actual branches. In short, in the future, banking services are expected to be provided only through virtual bank branches. Let's see to what extent the banking sector will be able to meet this expectation in the future.
With respect and love
