Future Branches 2017

December 04-December 06, 2017

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The Director's Report: Future Branches 2016


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The retail banking industry is facing significant changes with the advent of online and digital banking. The vast majority of money transactions such as deposits,withdrawals, transfers, credit card payments, etc. (which traditionally occurred in the branch) are now taking place online. This has lead to the question, “Is the branch dead?” The answer to this question is no, but it is changing. Banks are transforming their branches from transaction hubs to spaces where customers can go for complex banking issues, and especially where they can purchase new banking products like loans and investments. While transactions are declining in branch, the branch remains the place where the most revenue is generated, so it remains an important channel that just needs an update to remain relevant. While there is a customer experience part to this, it is more about sales and revenue generation. There is a lot of pressure from the most senior-level at the banks to lower the costs of operating the branches and raise the revenue generated from them.

Branch Innovation Briefing

The branch is at a turning point. As digital banking technologies gain traction across large market segments, banks are forced to rethink branch strategy. According to a 2015 survey, 33% of millennials don’t think they will need a bank in the near future. A different survey showed that in 2013, 48% of Americans said they would switch banks if their current bank closed their local branch. Just two years later in 2015, that percentage had shrunk to 19%. In this brief report, we give a snapshot of how several financial institutions are experimenting with new branch concepts to increase branch traffic and revenue. Since disruption is the new norm in financial services, we also take a look at what Amazon’s purchase of Whole Foods could mean for the financial services industry.