Challenges Faced by Traditional Banks

As with all kinds of banking systems, traditional banks are facing time-bound issues. There are some limitations that traditional banks, such as columbia bank aberdeen face today. Some of these issues are discussed below.

Digital transformation

Traditional banks now do not only have to compete with one another but also with digital banks. The digital format of online banks is obviously much better than that of traditional banks. In the digital age, this causes issues in gaining new clients. However, this is an issue that can be and is being resolved by many prominent banks by employing digital marketing and operations professionals.

Legacy infrastructure

Most prominent banks still use legacy infrastructure, which is composed of old data sets and core banking systems. Which this infrastructure provides a degree of firmness and security, they fail to compete with the more agile systems.

Due to the effectiveness of monolithic CBS along with other traditional banking systems, most banks refuse to upgrade. However, the lack of upgradation makes them lack in the new technology-driven banking system.

Disruptive banking models

As mentioned earlier, traditional banks have more competition now. What is worse is that this competition is from disruptive models. State-or-art models that allow clients to avail loans with just a single click or internet banks have been tough on traditional banks. They do not aim to compete but completely displace the old banking systems.

Columbia Bank
1154 NJ-34, Aberdeen Township
NJ 07747, United States
Phone: +1 732-203-9880

Maintenance costs of physical branches

The more branches a bank owns, the more buildings it has to maintain. The more branches, the more staff, hence, the more salary to be paid. Customer service and attendance, as well as building renovation and improvement, cost too much money.


Traditional banks have been in a state of crisis for over a decade. They have a lot of challenges to face to survive in the current banking system. Otherwise, they are under the threat of being displaced by digital banks.