AS TECHNOLOGY continues to change the way we do banking, and access as well as conduct other financial services, banker Frederick Pragnell says banks of the future are those using technology strategically now to drive access to services and provide customers with greater control over their financial data and transparency.

Pragnell, the chief process and improvement officer at JN Bank – the country’s third largest – said although banking products, at their core, have not changed over the years, financial institutions, including his, are prioritising innovation and embracing digitalisation to remain competitive, meet expectations and improve customer experiences.

He said banks are focusing on being adaptive to customer needs, which means traditional branches may still exist years from now, even with the push towards remote accessibility for products and services.

“You still have some places where physical branches are gaining popularity. South Africa is an example, and they’re leveraging digital technology very well; but I think one of the biggest banks out there has seen huge success because it is creating more physical locations where people can attend. A huge incentive to moving away from the ‘brick and mortar’ is that you mitigate your operating costs, but it really depends on the population, the government’s digital policy or approach, and the business,” he explained.

Pragnell said banking in the future will also involve more education for customers as financial institutions invest in more technology. He noted that investing in technology will not yield significant results for banks unless their customer bases also understand how to use the technologies optimally.

“A lot of the technology is intuitive, but the ability for a nation to pick up digital technology and its benefits comes down to the success of a nation in its literacy and its education,” Pragnell underscored.

The chief process and innovation officer added that as the world becomes more interconnected and digital, the future of banking will also be more open, similar to what now obtains in jurisdictions such as the United Kingdom and Australia, which have implemented the ‘open banking’ concept. This concept, he explained, allows financial institutions to share and manage customers’ financial data securely under a standardised system or central database.

Jamaica is set to head in this direction soon, based on the Bank of Jamaica’s plans to make deposit portability a reality locally. When effected, this initiative will allow customers to move their accounts easily from one bank to another.

“Open banking means more customers will be able to change banks or join banks instantaneously, and the way that works is, the banks that customers had a previously existing relationship with will have to share that information on the customers with the other bank they are trying to engage,” Pragnell explained.

“Domestically, a lot of banks are having to provide services by tapping into third-party vendors and things like that. In the future, as you’ll see in some of the more mature financial markets, you’ll have more centralised databases to provide the entirety of a KYC (know your customer) journey for a customer. That’s a bit down the road from us and it has to be led by the government,” he added.

Pragnell noted that new and emerging technologies, such as artificial intelligence (AI) and super-apps, also stand to further improve banking efficiencies, pointing out that aspects of AI, in particular, are already being integrated into JN’s digital initiatives, including the new ONE JN Passport app, which streamlines access to JN financial services.

“AI, for example, is helping us to make more nuanced judgements against customers based on the data that is provided to us, and that will improve exponentially over time. These technologies are going to make things move and flow at a pace that we haven’t even considered yet,” he said.

Pragnell reasoned that an institution that does not embrace digital channels risks losing their competitive edge in the future. However, he cautioned that there must also be a balance between embracing technological innovation and driving customer personalisation.

“Technology is often introduced at the cost of not being able to speak to people, not having someone know your name or cater to you individually. That’s something we at the bank are being very attentive to, because the JN Group’s brand value, over the last 150 years, has been down to the reputation we have with our customers,” he said.

“So, while we’re introducing digital technology, we have to keep that at the forefront of our mind to ensure that the very thing that brings value to us as a company is not lost as we try to transition into a new digital age.”