As Branches Close, Fintechs Can Help Financial Institutions with Digital Solutions
Written by Allison Murray
People are not visiting bank branches like they did before the pandemic, leading financial institutions of all sizes to consider speeding up plans for shutting branches down and scaling digital solutions.
The long-term effects of the shelter-in-place orders in states and municipalities across the country have caused businesses to go fully remote, enact a hybrid approach for essential work, or shutter completely until further notice. These government regulations resulting from public health concerns forced bank and credit union branches to temporarily close across the country, leaning into their ATM and online banking services to support their customers and members.
A recent article from the Wall Street Journal cites a 30% drop in branch traffic year over year for April and most of May, according to financial service research firm Novantas, as well as a 32% drop in teller transactions in March and April compared to last year. While big banks have invested in digital in recent years, community and mid-size banks have been slower to implement digital transformation strategies due to budget constraints or limited access to the user-friendly technology big banks have to offer.
Considering the global events of 2020 leading to a reduction in in-person banking—coupled with the 82 percent of financial institutions surveyed by PWC in 2017 stating they were looking to forge fintech partnerships in the next 3-5 years—financial institutions are poised to forge partnerships with fintechs to help meet consumer demands for contactless and digital technology. Together, fintechs and financial institutions can help drive consumers from branches toward digital solutions for everything from day-to-day consumerism and complex business transactions.
Throughout the pandemic, CheckAlt has been working with the hundreds of financial institutions and businesses we serve to ensure their payments continued to flow. For example, CheckAlt has implemented more than 50 new accounts during the pandemic including taking over mail processing for businesses and financial institutions that could not safely staff physical locations and process the mail themselves. We also helped enable more ATMs for banks and credit unions and kept electronic transactions online with our Catch! solution for the online bill pay check problem.
CheckAlt's Co-Chairman and CEO Shai Stern often repeats this truth: some of the best businesses are built in the most challenging times. It is in preparation for such catalysts that we at CheckAlt have positioned our business to support financial institutions in designing and enacting their digital transformation strategies.