Automation Will Bring More Deposits To Banks

In order to grow their number of deposits, banks should increase their customer base. Right?

It is typically assumed that in order to grow their deposits, banks need to focus on attracting new customers. By spending resources on marketing and developing flashy new products, banks will ultimately gain customers, deposits, and revenue.

While it is true that attracting new customers is one way to boost revenue, it is not the only way. Rather, banks can also boost their revenue by increasing the number of deposits that their current customers make.

In the push to build their customer base, banks tend to lose sight of the ways that their existing platforms and systems can be optimized for their current customers. Changing processes is difficult, especially for institutions like banks for whom security is paramount.

But if a bank’s goal is to increase its revenue, then change is worth it. New automated transaction technology is a customer’s dream, as it allows customers to deposit checks, transfer money, and more all with a few taps on their smartphone screens. Automated transactions have the chance to majorly boost the number of deposits that customers make with their banks, and therefore, boost their banks’ revenues. However, such revenue increases will only happen if banks decide to make a change and invest in improving their existing platforms.

In order to understand the potential benefits of automation, consider Venmo. Venmo is an app that allows people to make automatic transactions to their friends and has become one of the world’s most popular payment apps. In 2018, $62 billionwere sent through the app, and that total has already been surpassed through Q3 of 2019. Venmo’s success is not a result of savvy marketing or brilliant new technology. Rather, the app’s success is rooted in its easy-to-navigate user interface and the convenience that it offers to its customers.

Likewise, consumers have enthusiastically endorsed automation in banking simply because of the convenience that the technology offers. As the success of Venmo proves, consumers are more likely to use their banks for transactions when transactions can be made easily and automatically.

And automated transactions are not the only application of automation technology that can benefit consumers (and therefore their banks). Automation in customer service can offer consumers faster resolutions to their banking problems and a higher level of personalization than they were previously accustomed to. AI can now solve customer service issues quicker than bank employees can. When banks embrace customer service automation, their customers no longer have to wait in long phone queues to speak to a bank representative – their problems can instead be resolved instantly. When automation is applied to customer service, it improves levels of customer satisfaction and frees bank employees up to focus on other tasks.

In short, automation is a win-win for both banks and their customers. Consumers love the ease of automated transactions, and therefore, consumers love and are more likely to make deposits with banks that offer automated transactions. Additionally, automation has the potential to improve customer service interactions. The evidence is in and the ball is now in the banking industry’s court – will banks say yes to increasing their total deposits by embracing automation?