A REPORT aimed at forecasting the future financial needs of consumers and of the financial services industry paints a picture of a world where technology individuals has transformed the way do their shopping and the public manages its money.
The report, FSIA Thought Piece on Distribution Channels in Retail Financial Services, Ireland 1995-2020, prepared by the Financial Services Industry Association.
(FSIA) in conjunction with Andersen suiting, anticipates changes which will occur over the next 25 years. The report is predicated on a vision of a more prosperous society with people enjoying more leisure time, higher disposable incomes and with part time work more commonplace.
The report first looks at how technology will change the way people shop in the period leading into the next century. Technology in the home will be central to new. consumer buying patterns, says the report. It forecasts the emergence of multi systems a combination of television, multi media personal computer and telephone in a single unit.
While major companies argue about just how technology is going to reach into the home, not all will accept the vision set out in the report. However it argues that whatever way the technology is delivered, it will lead to a revolution in home shopping, with basic grocery and other shopping done entirely. from the armchair.
People will still "go to the shops" in 2 years time, the report predicts, but for different reasons. Outdoor shopping will be required only for products "which require the touchy/feely test," such as clothes or a. car which needs to be test driven. New shops will offer the consumer the ability to "shop for solutions". Rather than going to four or five shops to get the different products required for a child's return to school, one school service outlet will provide the lot.
The report also believes consumers will see a whole new type of financial institution gradually develop, with the "blurring of the boundaries between banks, building societies, credit unions, and life and general insurance companies." While this process is already well underway, the report predicts that in moving into the next century new groups will engage in the provision and distribution of a complete range of personal financial products.
Further, financial services will be delivered to the consumer through a whole new channels. Branches will remain, but will have a radically different role. There will be fewer, smaller branches but they will not disappear altogether as the branch provides emotional security for the customer the report points to a recent ICL/MQRI which showed that people still find forms banking more secure than other of banking such as telephone banking or working through ATMs. In future the report feels that branches will increasingly become centres for financial advice and general public still want face to face contact when considering major investments or loans, but routine tasks will increasingly be conducted on a computer or telephone link.
The services of financial institutions will increasingly be brought closer to the customers, the report predicts, with advice centres located close to places of employment and in some cases institutions actually "signing up" major employers who then provided services at the workplace.
Increasingly more attention will be paid to branch layout, which, designed as a retail outlet, will encourage consumers to browse and buy. Meanwhile the traditional administrative and processing work of branches wills be moved to central locations.
The report notes that ATM type service points are expected to continue to multiply... They will be able to perform a much wider range of functions and will be located not only outside branches but at sites with heavy consumer traffic such as railway stations. and shopping centres. The ICI/MORI poll in Britain showed that supermarkets were the place where people most wanted ATMs located. In addition to getting cash from these machines, the reports predict that they will also supply lotto tickets, travel tickets, entertainment tickets, telephone cards, travellers cheques and a whole range of other services. Cash will still be used, but only for a quarter of all transactions.
Ultimately the individual consumer will get delivery of financial services at home. Modern telecommunications will allow people to manage the bulk of their routine financial services through a telephone link. The report forecasts that stand along telephone banking will fail to develop, but that telephone services integrated with other services will catch the public imagination and become a standard way of doing business. Many transactions will be conducted via computer links provided through an upgraded version of the Internet which will both allow consumers to deal not only with their own banker but also to shop around and see what is on offer elsewhere.
Whether the FSIA has seen the future remains to be proved. But the relentless march of both business and technology looks set to transform the way services and financial services in particular are delivered to the public.
