Change of Banking Service Channels in Recent Years

This poem written by Robert Herrick came to life in the movie Dead Poets Society and is engraved in our memories. Although it is concluded to the carpe diem motto, there is also the dimension of living the moment keeping up with time. So, time not only changes numerically but also improves the order we are used to. Global crises such as the pandemic, force the existing structures to change irreversibly.

The history of banks goes back to before Christ. The borrowing and lending activities, which were initially made on the bench, developed banking with the development of trade. Also, the need to find reliable bankers ensured some merchants cooperate with other merchants and the first steps of the branches were taken. The Laws of Hammurabi, which are estimated to date back to the 18th century BC, include borrowing and lending, collection methods, crediting and methods of legally securing the debt. Especially with the influence of the Renaissance period, banking became more institutional and European Banks began to be established in the 17th century. With the development of the industry and entering the modern age, banking activities have accelerated. However, banks that were previously only located in the central regions started to open in the provinces as well. Of course, this is possible in favor of branching and even citizens living in the most remote corners can make their banking transactions without going to the central.

In ancient ages, banking was naturally conducted on an individual basis and generally had a local structure. Over time, the banking organization developed due to the increase in business, the emergence of some natural disasters and crises, and the need for loans to do business. In the 19th century, banking activities went beyond borrowing and lending and enabled the circulation of capital market instruments in commercial life. After the Great Depression of 1929, banking activities became more and more important. Because at that time, to recover from the damage caused by the First World War and to recover the damaged countries the stage of giving credit to them was started. Investment and development banks became widespread after other crises and especially the Second World War. Of course, banks have chosen to specialize and develop their staff to meet the increasing needs and respond to the demands in the best way. This turned the banking sector into a sector that serves almost every field of the economy. For example, according to data Banks Association of Turkey; In Turkey, there were about 6,500 bank branches in 2002, that number was closer to 9,000 in 2009, there were 11,564 in 2017, and has fallen to 9867 as of February 8, 2021.

With the increase of computers and technology in our lives and especially the spread of the internet, electronic banking has become important. With electronic banking, banks' classical working hours were exceeded and customers started to be able to make transactions whenever they wanted. Of course, the spread of mobile devices has also been effective in this case. For this reason, interest in alternative distribution channels has intensified.

With the widespread use of the Internet, people are more likely to make transactions with one click without going to branches. This has ensured that the need for personnel for banking transactions is disappeared and customers can make banking transactions via their computers or mobile devices. Going out of traditional banking and making transactions in this way without going to branches are called alternative distribution channels in banking literature. In other words, this name is given to the tools that enable customers to make transactions without going to branches with the use of technology and various technological infrastructures. Alternative distribution channels include banks' call centers, ATMs, internet branches and mobile banking applications. Customers who do not have to go to branches will be able to make almost any transaction on the internet via their mobile phones or computers. For example, according to İşbank data, 61.2% of the transactions made through this bank in 2009 were realized through alternative distribution channels. This rate has increased even more in the past 10 years.

It is important for bank employees that increasing their current competencies, being flexible, knowing their resources well, investing in their development, developing themselves in technology and creativity, Also, if necessary, getting opinions from consultants will increase their belief in themself.

Due to the coronavirus affecting the whole world, bank branches shortened their normal working hours and the need for remote transactions has
increased. The main reason for this is people are not wanting to go out to be protected from the virus. For this reason, banks have focused on alternative distribution channels and most of the transactions were made through mobile banking applications and internet banking, especially during the pandemic period. One of the reasons this is effective is that banks make it possible to make almost every transaction via internet banking. For example, 99% of the transactions of Garanti Bank can be made via internet banking. Banks that were prepared for crises and foresee this and invested in alternative distribution channels were able to manage customer needs well during the pandemic period. So, during this period, the use of alternative distribution channels has increased by 20-30%.

With the development of technology and investment in innovation, alternative distribution channels have come to the forefront more. On the other hand, this development changes the classical banking idea. According to Deloitte's survey, customers like branches more. One of the main reasons for this is the complexity of the interfaces and the opportunity to communicate face to face. However, this problem is a fact that can be overcome with artificial intelligence and innovation. Also, increasing technological literacy will change this approach of customers.

Time is flowing like water. Today's technology will not exist tomorrow. These changes are affecting organizations, employees and ways of doing business. The necessity to analyze these changes well and resilience is an important issue for both individuals and organizations.