Predictions of the end of the branch channel as we know it have become commonplace; they are also widely exaggerated.
It is acknowledged that branch visits are down and bank branch closures have accelerated across mature markets for around a decade. On the other hand, there is a growing requirement for banks to decide how to maximise the potential of the branch and, in particular, to work out the extent to which future customer relationships are managed remotely rather than face-to-face.
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Interestingly, a number of banks have developed a new-found enthusiasm for the branch, as they have learned just how hard it can be to sell or build relationships through digital channels.
However, a number of key questions will increasingly be asked: Why should banks maintain such large branch networks? How can banks maximise the use of IT and technology to scale down the size of a number of their branches?
Some banks acknowledge that they have too many branches and could probably service their clients just as well with fewer outlets, while a large number of lenders continue to make major investments in new branches although the cost of doing so can be very expensive.
With the branch set to remain at the heart of banks operations for the foreseeable, lenders need to analyse how to reduce the cost of the channel, or at least make it more efficient.
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By GlobalDataEach of the lenders featured in this supplement offer best-case examples of how to support the branch channel by prudent investment.
Greeces i-bank offers an outstanding example of the electronic banking shop, and Dexia and Itaú flag up interesting examples of the open bank concept. In the UK, Lloyds TSB is a leading example of community bank branch investment, while Capitec in South Africa is the perfect case study for the store banking model.
Virgin with its lounge concept and Santander with its premium lifestyle example are other fascinating lenders to examine.
In Colombia, Helm with its multisensory branding and Bancolombia with the innovative use of the social hub have deservedly attracted attention.
If banks around the world think carefully about how to maximise the potential of the branch then it is safe to predict that the death of the branch as a mainstream service channel is not going to happen any time soon.
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