Banks shouldn’t be asking whether to invest in digital versus physical, but rather finding better ways to integrate the two models, says Aubrey Hawes, senior director of Oracle’s Financial Services Global Business Unit.
As more digital-only banks gain market share, Hawes said, banks with brick-and-mortar locations should be focused on offering their customers a "channel of choice."
"Banks still see a physical presence as important to their overall strategy," Hawes told Banking Dive.
Hawes, who focuses on the technology company's digital, pricing, billing, originations and core banking solutions, said banks should reimagine their branches to be more of an interaction center as opposed to a transaction center, adding most banks have already automated the easiest types of transactions.
Faced with competition from digital banks that don't have the same fixed costs around physical distribution, Hawes says the omnichannel strategy allows traditional banks to "leverage the best of both worlds."
"If I have omnichannel capability, maybe someone starts a loan process online and wants to be able to walk into a banking center to complete it," Hawes said. "If they started this process and they can't complete it, they can resume it there versus having to start over."
Last month, JPMorgan Chase opened its flagship branch in New York City, part of the bank’s expansion strategy, which includes 400 branches in 20 new markets across the U.S.
Chase’s unveiling of its flagship branch follows the company’s announcement in June that it was closing Finn, a digital banking app the bank rolled out last year in an attempt to attract younger customers.
"Does this mean they're walking away from digital? I would say it's quite the contrary," said Hawes.
Hawes said the app failed to gain the same traction as other digital challengers like Ally Bank, Chime or Varo Money.
Finn only attracted 47,000 users, according to estimates from Cornerstone Advisors.
"I think that Finn was JPMorgan Chase trying to be innovative and agile, wanting to go back and try something new," Hawes said. "A lot of these successful banks are trying to be innovative. If it doesn't work, it's not bad. But you have to try or you'll go stale."
