“Smarter”​ Digital Banking


In every town across the UK, our high street is changing.

The majority of “bricks and mortar” businesses — including our high street banks — are closing. Additionally, the COVID19 pandemic has devastated many small businesses and, when walking down the high street, there are many shops and stores that are empty, boarded up or imminently winding up with “closing down” signs plastered across their storefront. This also extends to high street banks who have declined to sign up to a pledge to make sure there’s at least one branch in every town.

It’s not a phenomenon that’s limited to the UK either; all over the world, traditional banks are gradually disappearing and being replaced with more efficient services.

Post-COVID19 recovery has been hit hard by the financial crisis that is putting a lot of pressure on business owners forcing them, at pace, to migrate their previous business models to digital models using ecommerce technology often underpinned by Artificial Intelligence (AI), machine learning (ML) algorithms and other emerging technologies such as Blockchain and Augmented/Virtual Reality (AR/VR).

Automation technologies such as Robotic Process Automation (RPA) are on the rise and, at the same time, consumers are themselves busy adapting their lifestyles which are fast becoming a hybrid of “work from home”, “work from office” and “work from anywhere” options.

Traditional Banking is dying

Traditionally, customers choose their bank partially based on location; people didn’t join a bank which didn’t have a local branch. There were lots of services which needed to be conducted in-branch, from paying in a cheque to applying for a loan, and everything in between.

However, as technology has evolved more customers have started to take advantage of the online services that banks have offered. In turn, this meant that the number of customers visiting the branches shrank. Some branches reported seeing less than 10 customers per day.

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One-third of UK bank branches closed in the past five years, led by RBS, which cut its network 56% between January 2015 and August 2019. These large-scale closures are driven by the need to slash some of the massive costs associated with operating physical infrastructure — freeing up funds to invest in building out digital tools. These branch closures are going to continue — TSB is closing 80 branches this year, Lloyds is closing 56, and HSBC is closing 27 — and will be a primary factor behind the decline in branch penetration. Some banks — like RBS and Barclays — have turned to non-traditional branch formats like grocery stores or post offices to maintain a wide geographic footprint without investing in added infrastructure.

While it’s true that a minority of customers found this to be an inconvenience, for the majority of people it simply wasn’t an issue.

Banking, as we know it, is dying. Banks, as we know them, will either vanish or mutate. 

The truth is that banking habits have simply changed, with the majority of transactions and services now available online. Many millennials have never visited a bank, nor are they likely to need to do so in the near future. Perhaps it’s time to accept that traditional banking isn’t a significant part of the financial future?

Looking Ahead: Customer Centric Digital Ecosystems

A majority of global banking executives don’t see a future for the branch-based model.

According to eMarketer (July 2021), 65% of worldwide banking executives expect that the branch-based model will be “dead” within the next five years, according to survey data collected by The Economist Intelligence Unit (EIU) on behalf of Temenos: a Swiss-based banking software provider who is busy rolling out (globally) an explainable AI (XAI) product “Temenos Virtual COO” which intends to show how AI can streamline back-office functions of a bank aggregating data to give overviews of financial health whilst cutting administrative workloads.

There are many other examples, which includes Santander Consumer Bank who have been piloting Robotic Process Automation (RPA) in the Nordic region since 2019 to process account activity. The Spanish-based banking giant reported in July 2020 that the pilot saved 30,000 man hours in 2019 and more than $2 million. The RPA pilot utilised 150 intelligent bots, offered by Automation Anywhere, to automate tasks such as loan processing.

The Bigger Picture

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Insider Intelligence for the UK carried out an insightful study into branch penetration forecasts. “Penetration” is defined as bank account holders ages 18+ who visit a bank, credit union, or brokerage branch at least once per year.

Here are some interesting facts (source: eMarketer, July 2021)

  • Branch penetration in the country will decline from 65.3% in 2019 to between 60% and 62% in 2024. Temporary branch closures during the pandemic accelerated a trend of UK banks scaling back their physical footprints to rein in operating costs. Avoiding branches during lockdown is the most common reason (40%) why consumers are using digital banking more frequently, per Virgin Money UK.
  • Digital banking penetration will climb to reach between 75.8% and 78% by 2024, up from 68.7% in 2019. Banks will bolster their digital channels by prioritising security measures and ensuring their platforms can accommodate heavier volume — an issue that was emphasised during the pandemic when overwhelming volume led to outages among some major banks. provide educational resources to streamline the transition to digital for those users to make the onboarding experience and navigability of digital platforms frictionless, to encourage repeat usage. 
  • Smartphone banking penetration will spike from 37.1% in 2019 to reach between 46% and 59% in 2024. The immediate impacts of the pandemic and lockdown measures will drive up smartphone banking penetration as new users turn to these channels out of convenience. And the growing presence of neobanks — digital-only banks that don’t operate branches — is also driving up penetration, while pressuring incumbents to improve their mobile banking products. They have gained popularity through their competitive offerings and slick digital user experience — their growth has been fuelled by branch closures, Open Banking regulations, and consumer desire for convenient banking options. Incumbents will thrive with a two-pronged approach to their mobile strategy. First, they’ll add innovative features to reach parity with upstarts and attract younger consumers, and second, they’ll simplify their interface to engage hesitant digital users, including older consumers.
  • ATM penetration will drop sharply from 84.7% in 2019 to land between 74.2% and 76.2% in 2024. There has been a major years-long shift away from cash in the UK, and as digital channel penetration increases and functions like depositing checks and transferring funds between accounts can be done remotely, consumers will be even less reliant on ATMs. Banks have begun leveraging their ATMs to bridge the gap between in-branch and digital capabilities, while still serving those customers who need cash access. Enhancing ATMs with branch-like capabilities such as video calling with bank staff can allow banks to cut costs, streamline processes, and accommodate customers who prefer in-branch banking or have not yet adapted to digital banking.
  • Call centre penetration will tick up to 34% in 2020 but will return to pre-pandemic levels of around 26% by 2024. Despite advancements in digital channels, consumer preference for human assistance have sustained the need for call centres that have served as the front line of communication between customers and banks as demonstrated during the onset of the coronavirus pandemic. This channel will retract to its pre-pandemic levels when the COVID19 crisis abates with Banks likely to streamline in two ways, (i) they will take a targeted approach to their call centres to create dedicated lines for different inquiry categories (like mortgages) or demographics (like the elderly), and (ii) banks will expand their customer service by opening it up on additional channels such as iMessage to help divert volume to cut costs and make customer service conversations more efficient.

Closing Thoughts

Even with a partial lifting of COVID19 lockdown measures, the coronavirus continues to limit movement of people—and this has hit the UK high street hard. From retailers with a high dependency on physical stores to restaurants and coffee shops without delivery facilities, the obstacles have proven insurmountable for some. For others, the longer-term question is, “Will the UK high street be able to recover when (and if) normalcy returns?”

One thing is certain high street banks are dying and rapidly being replaced by digital platforms. These platforms will typically be enhanced using AI and emerging technology.

As banks look to enhance their digital channels and drive adoption, they will focus on the following three areas:

  1. Banks can offer educational resources to first-time digital banking users to encourage adoption of digital platforms and increase awareness of the available tools. The pandemic has created an opportunity for new users to discover digital banking platforms.
  2. Investments in AI will allow banks to deepen engagement through personalisation. Through AI-powered features like real-time analysis of spending habits, banks can deliver insights that help customers manage their specific financial situations. AI solutions to improve the customer experience will be a key opportunity. Banks paused some of their investments to curb costs amid the economic downturn, especially since AI programs don’t generate an immediate return on investment. But banks will resume their investments in AI once the worst of the pandemic passes.
  3. Designing platforms with an emphasis on security could be integral in encouraging adoption. As new users come onto digital platforms, it’s imperative for banks to ensure the security of their customers’ most sensitive information and communicate that priority to customers — especially given the size and frequency of data breaches globally. This could cement loyalty beyond the initial adoption period, as a platform that’s not perceived as secure could lead to customer distrust or turnover.

Additionally, the combination of digital transformation and emerging technologies will give rise to

  • Democratisation: enabling users easier access to technology without getting any training. It is providing people with expertise; they look for without investing much.
  • Multi-experience: providing the customer with an immersive experience using Augmented Reality (AR), Virtual Reality (VR) and Mixed Reality (MR) — a new trend offering a multichannel human-machine interface. In some cases, this might extend to “human augmentation” which will involve changing people’s inherent physical capabilities implanting technology elements.
  • Transparency and Traceability: with the increasing demand of technology advancement, customers are increasingly aware of their personal information and how valuable it is. This is the domain of topics such as #responsibleai #ethicalai and so on focussing on six areas: ethics, integrity, openness, accountability, competence and consistency.

Transparency and Traceability will typically focus on six area: Ethics, Integrity, Openness, Accountability, Competence and Consistency

  • Autonomous devices/solutions/services: will lead to automation of human tasks that increases productivity which were previously performed by people. In some cases, “mundane” and “administrative” tasks done by humans will become obsolete (or at the very least, offer an option of “human versus machine”). Typically, this will be underpinned by collaborative and augmented intelligence using AI and Machine Learning much of which already exists in robots, drones, vehicles, and home appliances.
  • AI security: as the volume and speed of data being generated continues to grow, the deployment of AI and emerging technologies must be predictable and safe. This extends to data privacy, data integrity and the rights of the consumer.

While much of this article has outlined changes to traditional banking, it is the rise of AI and emerging technologies that will ultimately make noticeable changes to our lifestyles and day-to-day choices.

Whether we are using AI and emerging technologies to automatically streamline and enhance businesses processes, develop a “digital twin” or deploy smart solutions across a business, community or country, we all have a responsibility to be future ready.

After all, a future which is built on “AI for Social Good” and “AI for All” is one that we all should be invested in — for everyone’s sake.

Tackling AI bias .. using AI ..!


Great article in NYTimes.com showcasing a different approach to tackling the issues of #bias in #artificialintelligence and #machinelearningalgorithms.

Parity is one of many organisations, including more than a dozen start-ups and some of the biggest names in tech, offering tools and services designed to identify and remove bias from A.I. systems.

While other start-ups, like Fiddler and Weights & Biases, offer tools for monitoring A.I. services and identifying potentially biased behavior, Parity’s technology aims to analyse the data, technologies and methods a business uses to build its services and then pinpoint areas of risk and suggest changes.

Rumman Chowdhury, PhD

Liz O’Sullivan

The Algorithmic Justice League

The tool uses artificial intelligence technology that can be biased in its own right, showing the double-edged nature of A.I.

Tools that can identify bias in A.I. are imperfect, just as A.I. is imperfect.

However, the goal is to use the tools to create a wider dialogue among people with a broad range of views .. and bring more diversity to solving the problem of A.I. bias.

#aibias #diversityandinclusion #ethicalai