At a time when the banking landscape is in flux—impacted by the rise of digital, economic and regulatory forces, new market entrants and empowered consumers—the debate rages around one question. Are bank branches alive or dead?
Considering that Accenture research shows that the 25 largest retail banks spend more than $50 billion annually to maintain more than 43,000 branches across the nation, this is certainly a provocative question to ask. The problem is that it is a flawed one.
The question presumes an either-or proposition when the answer is somewhere in the middle. The future of branches isn’t about being alive or dead, it’s about being different.
Consider what Accenture research reveals about consumer attitudes. In a survey of nearly 4,000 retail banking customers in the United States and Canada, one in four customers report that they would likely consider a branchless digital bank if they were to switch from their current bank. Industry observers might consider this a death knell for the branch. But this isn’t the case.
Our research also tells us that branches still remain the pre-eminent sales channel and will for some time. Customers still value the branch; nearly 60 percent of traditional bank products are sold via the branch. What’s more, 66 percent of customers still prefer to “talk to a person” rather than purchase a banking product online.
Banks can reconcile these seemingly divergent consumer views to make the most of the branch network as a strategic asset into the future. Doing this means breaking from traditional notions of what a branch is and how it operates—thinking about branches differently in several key ways:
It’s a trunk, not a branch.
The name “branch” suggests banking locations that are apart from the center, rather than being the center themselves. In the digital era, the branch must become the center of an ecosystem that fulfills customers’ financial and non-financial needs. This is the Everyday Bank.
It’s about experiences, not transactions.
Customers—even those that prefer digital channels—are hungry for engaging experiences. Just think how people flock to the Apple store to engage in ways they cannot online. Banks can create in-branch experiences that keep people coming back by offering non-traditional banking services, new advisory services and other approaches rooted more in relationship building than in transaction processing.
It’s every channel, not one channel.
Some banks still think of the branch as a single, isolated physical channel. In the era of digital banking, the branch must become a doorway to a connected, omni-channel banking experience where in-branch and digital experiences blur and coalesce to meet customers’ needs.
Branches are evolving into something different—and exciting. They just might be poised to become more alive for customers than ever. For more insight on the future of banking business models, explore our Banking 2020 report.