Will banks operate in buildings in the future, or do we expect a radical downward shift in their demand for real estate? Besides the accelerating rate of technological advancement, and the increasing forcefulness of customers’ demands, other trends are going to disrupt the way banks operate.
Our ecological consciousness now demands that we begin doing away with processes and modus operandi that negatively impacts our environment. The use of paper means felling trees and creating trash, yet digitization makes all that unnecessary.
Another trend we need to keep our eyes on is our newfound love for flexi-time. Organizations had already started experimenting with this concept. COVID-19 just accelerated the process and made it compulsory, at least for now. However, companies that had already tried it out pre-COVID-19, like Yahoo!, rolled back due to disastrous results on productivity.
While some companies like Yahoo! and Bank of America reported a drop in productivity when they introduced flexi-time (leading to a rollback on the program), others reported increased productivity (BBC worldwide, AT&T, and UnitedHealth Group).
Why would flexi-time increase productivity for some organizations and reduce it for others? Flexi-time is made possible by our ability to work and collaborate on projects through online platforms. This, therefore, allows us to have extra time that we would normally lose in traffic. Instead of commuting, we now talk of tele-commuting.
On the concern that flexi-time would make employees take advantage to do non-work-related activities to the detriment of their work, we need to redefine “presence”. Is presence having an employee in my sight, at the office, thus giving me the reassurance that they are at work? Or is it rather now a more pertinent question to just keep my eye on the employee’s KPI’s, whether I am physically seeing the employee or not?
That said, the new normal will be counterproductive if it abandons us to the distractive environment that is home. For instance, working from one’s living room is definitely distracting. Various options to solve that would be to turn one’s domestic staff quarters into a home office, car garages, and other spaces or even better to go to a shared workspace near to one’s home.
BIG DATA INTEGRATION
According to Central Bank of Kenya data, agency banking transactions rose by 18.75 percent to Sh5.7 trillion in the year ended June 2020. From the report, contracted bank agents handled 800 million transactions, translating into an Sh900 billion increase in the value of transactions compared to 2019. The trend will certainly encourage banks to explore decentralized business models.
There are so many incubators, accelerators, and other organizations offering shared workspace now that it will soon be possible to find such spaces near one’s home. Some of these workspaces are idyllic, with a kitchenette for preparing a snack or coffee, a garden to take a walk and refresh in, less formal rooms to take a break in or meet someone, etc. Real estate service firm JLL suggests that proptech and smart buildings can be combined to support employees’ health and well-being through design efficiencies, integration of the Internet of Things (IoT), and leveraging on Big Data.
So, will banks dispense with bank branches in the future? While I still hold that they will largely scale down on huge buildings and numbers of branches, I am now convinced that they might seek other types of real estate, perhaps in collaboration with similar organizations that have similar needs for security of data warehousing and security, and perhaps in collaboration with owners of shared spaces.