Is Shared Banking the Next Wave of Banking Evolution?

Matt Phillips, Head of Banking – UK and Ireland, Diebold Nixdorf

Matt Phillips, Head of Banking – UK and Ireland, Diebold Nixdorf

The how, where and why of financial services provision continues to evolve across every economy and every country globally. As a consumer 10 years ago, you would have been unlikely to imagine how much the face of banking has changed in recent years. These changes have accelerated particularly quickly in the last few years as new services are introduced, alongside a shift in the locations where services are offered and consumed.

As part of this shift in how and where consumers can access cash and banking services, the adoption of shared banking solutions is on the rise. What was considered a relatively new and potentially risky concept a few years ago is fast becoming a proven way for some countries to maintain accessibility for consumers. Whether it is a combined network of ATMs under a new brand in the market or a collaborative effort between banks, the rise and rise of this setup is likely to continue to accelerate as a way to balance availability and efficiency.

With this in mind, what can we learn from those first-mover countries where shared banking solutions are already in play?

Firstly, and very evidently, there is no size solution that fits all. Population density, country geography, bank network set up and how far a country is along its digital adoption path all play a significant role in developing a fit-for-purpose solution. Alongside this, consumer attitudes and the appetite to adopt new services will determine overall success. Extensive market and consumer research can help shape strategic decisions, as well as analysing the models already implemented across European markets.

Once an overall approach has been assessed and agreed upon, the physical infrastructure is another critical consideration. Again, we have seen variations in strategies in different countries with established shared banking solutions ranging from a complete outsourced solution, to banking hubs, to managing networks in close and dedicated partnerships. Reliability is essential for both providers and consumers. Therefore, the creation of robust and adaptable networks and services is non-negotiable. As we have seen in recent years, economies, politics and consumers can pivot dramatically within short timeframes, so the ability to withstand this and offer service stability is essential for sustainability.

The narrative around access to cash differs across Europe. Some countries have progressed to digital too swiftly and are now backtracking, whereas other cash-heavy markets are at a different stage of evolution in maintaining access to cash. Regardless of the progression stage, local governments and local policies need to be an integral part of a shared banking solution. In some countries, we have seen governments introduce legislation around the proximity of services, for example, ensuring an ATM is available within a certain distance of every consumer. As the need to protect vulnerable members of society remains strong – as well as the ability to simply offer all consumers a choice of payment options – it is likely that governmental involvement in future shared banking rollouts will increase.

The ability to be quick to market is also a top priority for new implementations of shared banking solutions, but equally one of the most difficult to achieve. The combination of the factors already discussed – set up, infrastructure, government involvement and unique country requirements – all create a hugely complex set of variables to manage and navigate in a timely manner. Starting early and taking the lessons learnt from other countries and setups can all help manage the journey in the most effective way possible.

Finally, the standalone and most important factor in the decision-making process for shared banking services is the consumer. In the effort to streamline services and drive operational efficiencies, it can be easy to lose sight of the ultimate reason the services are being provided: to satisfy consumers and deliver the financial services they want and need.

Taking a truly customer-led approach and involving customers in the progress at every stage can be the difference between first-time success and missing the mark, essentially adding more cost and time to a new implementation. Naturally, solutions and offerings will also evolve and adapt over time. Therefore, an ongoing commitment to consumer involvement and education at every turn will increase the likelihood of delivering the right services in a cost-effective and sustainable manner for the long term.

In summary, shared banking solutions will continue to advance as the world of financial services shifts, advances and diversifies. Providing accessible and reliable services for all members of society will remain a pivotal priority for the financial industry. Collaborative efforts to deliver services in new ways will continue to form a stable backbone of this commitment, ultimately creating a blended mix of both physical and digital services for all consumers in all societies.