Does Increasing Use of Technology in Banking Also Increase Risk?

What's Going On

7By Robert Stitt

Technology plays a much larger role in the banking industry today than ever before, and the impact it will have is only going to grow in the years to come.

Ken LaRoe, the founder of the First Green Bank in Central Florida said, “The traditional bank model will be dramatically different in five years. There will definitely be less people coming into the banks.”

According to a report by the Pew Research Center, in 2013 “more consumers [already] did their banking online than at a physical branch.” The Network Journal notes that “Chase Bank and Bank of America recently surpassed 50 percent of check deposits being done on mobile devices or at an ATM.”

Greg McBride, chief financial analyst for, says of the technological shift in banking, “You have to innovate and keep up with consumer demand, or someone will eat your lunch. You have to keep up, or you’ll be run right out of town.”

A few banks are taking McBride seriously and are experimenting with virtual ATMs. The Network Journal notes that Bank of America is one of those banks and is already running ATM machines with “Teller Assist” in 26 markets.

A virtual ATM or Teller Assist ATM is an ATM machine that offers a live link to a teller at a remote destination. The tellers are often available for extended hours and can take care of banking services that customers would normally go into the bank to perform.

Bank of America spokesperson, Tara Burke, said that the banks need to understand what the customers are looking for and provide them with those services. “People are thinking differently about banking. We are trying to provide that flexibility and service. It revolves mostly around looking at how customer behaviors have changed,” she said.

The online banking revolution is also making it possible for people to choose banks just about anywhere. You no longer have to go to the bank down the street, now you can bank on the other side of the country, or even in another part of the world. Banks are having to compete not just with the others in their locale, but others on a regional, national and global scale.

The increased competition is good for consumers, but it is a challenge for banks. Small banks have to deal with large banks, large banks have to deal with international banks, and all of them have to deal with online banks that have little to no overhead.

While technology is certainly making an impact in the industry, the brick and mortar banks are not closing down just yet. There are still some things, such as retirement planning or large loans, that people feel more comfortable doing with a banker.

One thing is certain, internet banking is likely to be the next wave of the future; you may want to test the waters soon, or risk being left behind.




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