Is the Branch Dead – or Just Evolving?
One of the hottest topics of debate in the media and among the "twitterati" is the future of the branch. With dramatic adoption of smartphones and tablets and the increasing sophistication of digital banking applications, will branch banking go the way of the buggy whip? We asked experts to weigh in on whether this staple of financial services is here to stay and, if not, what it might look in the future.
Senior VP, Bank Intelligence Solutions
I have no doubt that branches will remain fundamental to retail banking for some time to come, although the role of the branch will certainly evolve. But whether or not anyone believes branches are going away is almost irrelevant because we have them today, they are a significant expense for almost every institution and they’re not going away tomorrow. The better question is how do we get them more focused, more customer-friendly, and to be a better contributor to the bottom line? New technologies like mobile are impacting the branch, but there are other new technologies that will keep them relevant. When banks really begin understanding and harnessing data, they can make sure their branches are focused on the right markets, the right customers and the right products. We are doing this today and the tools will continue to get better. Big data is one of the technologies that will help keep the corner branch a mainstay of the banking experience.
VP, Strategy & Business Development
Don't tell Gen Y consumers the branch is dying – our own research found that hyper-connected Gen Y consumers still rely on branches to manage their financial lives. However, online and mobile technologies are clearly changing consumers' expectations of the branch and financial services overall. Instead of thinking in terms of eliminating the branch, financial institutions should be focused on rethinking their channel strategy to most effectively serve today's customers. This means a strategy that leverages the strengths of each channel and the way that customers interact in them. For instance, online banking is suited for structured self-service sessions like managing a budget, while mobile meets a consumer's need for information and quick transactions anytime-anywhere. Mobile devices also enable unique capabilities, such as location-based services that could reinforce the branch presence. Despite all the developments in digital banking channels, the branch remains a relevant and important channel where consumers can turn for information and advice. Financial institutions can and should continue to examine how customers interact with their institution and deliver an overall experience that is consistent across channels, whether it's online, on the phone or in person at the branch.
VP, Strategy & Business Development
No, the branch is not dead or dying, just evolving. The branch still plays a vital role in the engagement of customers. The physical branch presence can be equated with comfort and security – a strategic channel for advice – particularly when it's time for a major life event like a new home or saving for a child's education. With the help of integrated, cross-channel technology, the face-to-face interaction at the branch can enhance the banking experience with knowledgeable advisors offering tailored products and services to meet customer needs.
Consumers want the ability to open bank accounts quickly and efficiently in whichever channel or combination of channels is most convenient – branch, online, ATM, mobile phone, tablet, etc. They want the ability to save an application in one channel and return to it later in another. They want to pay their bills on the go, deposit checks from home and speak to banking specialists for professional advice. The future of the branch and banking services in general is tied to providing a customer-centered experience that spans channels.