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The Phygital Future

For over 25 years, Allen International have been helping Banks from all over the world prepare for the future. A future that for most is very uncertain. In this article we explore what role stores could play in a Phygital future (a combination of physical and digital), and explore how this combination could be used to engage customers in the most profound ways.

If we fast forward the clock to 2019 and take a stroll through the downtown of a vibrant European city, all around us people are using technology, maps to find their destination, apps to order a cab or chat with their friends, networking with colleagues on the other side of the planet, catching up with the latest news or trends, monitoring their activity and health and so much more. All around us, streams of data are flowing - young and old are enjoying the benefit ‘always on’ technology provides… and in doing so they are providing retailers with vital information that helps them improve the way they serve their customers.

Through this lens, it is easy to see how the physical branch (as it stands - with tellers, large waiting areas, consultation rooms and expansive offices), does not have a future. Is there really a reason to visit a Bank any more? But, let’s take a step back for a moment and really look at the dynamics of the situation I describe…

The are a couple of things that everyone understands:

  • That the future is digital

  • People like people

  • The Bank store is here to stay - but it will be smaller and they will be fewer in number

  • The future is all about brand and customer experience

  • Business growth will be determined by trends - stylistic, demographic and statistical

  • Everyone is connected

So what if…

Bankers are now retailers - retailers think differently to Bankers, and Bankers need to catch up if they are going to survive. To help Banks understand what the future will look like, there is no better place to look for inspiration than to what is called GAFA (Google, Amazon, Facebook and Apple). So why then, in the future, will Banks need a physical presence? Here are five reasons why:

A Showcase

A Bank will need physical stores, with products and services displayed so customers can pick, choose and personalise. Where customers can seek and obtain advice from expert humans, who can help them tailor a solution to suit their specific needs. Where the Bank can showcase it’s technology prowess, it’s collaborative ambitions and fully immerse customers in their brand. Creativity will drive new store experiences, where stores are able evolve all the time, perhaps adapt to the time of day, clientele, trends etc… If the stores of the future will be smaller, fully digital with universal Bankers then this could extend even further to Banks being able to change digital content daily, maybe even the entire look and feel of their stores… imagine a store that changes everyday or every season or a store that will actually be a blank ‘canvas’ that will host a variety of financial brands competing for clients - from Banks to insurance companies, all pure digital spaces… branded digitally, with artificial intelligence and virtual reality capabilities. The possibilities are endless… and amazing.


Large retailers like Amazon have ‘an acknowledgement of the inability of the internet to provide a certain retail experience that customers enjoy’. Online customers tend to go to a website knowing what they want to buy. By contrast, customers visiting a physical store often make impulse purchases, even if they go in with something specific in mind. Banks could learn more about serendipity from their stores, and perhaps find better ways to increase buying online.

Make customers do the work

Banks have the capacity to understand us better than anyone. They know our spending habits they know where we go and what we do. In the future, Banks will need to be more nimble in where they open their stores, their store formats will be important, a hub and spoke model will be needed where customers are driven to a specific store for a specific service or services. By collaborating with other organisations, Banks will be able to leverage their knowledge of customers to learn even more. Look no further than Amazon, who are scheduled to open another book-less campus bookstore in Cleveland soon. Students order textbooks and dorm furnishings online and come to these stores to pick them up. The centralised pickup location ensures brand engagement in physical locations and broadens the convenience appeal.


Retailers like Amazon already make heavy use of robotic technologies. A trend that is growing in Banking… by understanding who customers are, what their needs are and how to better serve them, Banks will be in a position to help customers in a more personal and meaningful way. They will be able to offer customers products that serve their needs better - big ticket items like mortgages and loans, along with smaller ticket items like daily motor insurance and special situations insurance or micro-loans. Creating an environment to discuss and serve customers needs better will be a new data driven trend that will directly impact how Banks serve their customers in a physical space, automating some products and services, using push technologies in stores, malls and high traffic areas to speak to a customers specific needs through their devices. Some analysts are suggesting that Banks who win in these areas could even license their technologies to other organisations or groups to help them engage in a more meaningful way with customers and potential customers - this could even account for up to 10% of Bank profits by the year 2020.


Loyalty programs will become more important to Banks. By taking an agile approach to rewarding loyalty, Banks will be able to heavily promote specific products and services through multiple channels. I foresee a time when Banks will have such an in-depth understanding of their customers propensity to buy - including through which channels they are likely to buy, that the Bank will be able to choose who, and when to drive customers to their physical locations for advisory services or rewards.

So, the future us very different to the present, where we, as customers will demand a more personal and relevant service from our Bank, and where Banks will have to offer this to survive. Using data, understanding data and understanding trends will be the best and only way for Banks to survive. By funneling customers to a brand experience, a helpful and meaningful service, greater convenience or all of the above, Banks will be able to leverage their knowledge of each and every one of us and provide a service that is really unparalleled. I am looking forward to the future and looking forward to helping Banks shape it.