Now and then, there are authors, consultants and/or speakers at industry events that want to position themself as thought provokers in the banking industry by ridiculing the branch network. The last example of Branch Bashing is the author Brett King with his two books “Branch Today, Gone Tomorrow” and “Bank 2.0”. I am the first to agree to that the Branch Network will have to change, but I hate stupid arguments and the simple dismissal of the Branch without considering how the branch network can be used in a mix of distribution channels to add customer value.
Some of the arguments for the demise of the branch show that there is a thin line between thought provoking and merely provoking. I would say that I do not see the “thought” in the following reasoning:
“If you no longer need to go to the ATM to withdraw physical cash or currency, then everything you do on the ATM today can be done on your mobile app phone. If branches no longer need to deal with cash, then a large part of the reason for their existence disappears.”
Source: Brett King, Bank 2.0
Another popular argument is that 90% of all banking transactions are done on-line. What is often forgotten is that these transactions are not profitable. Regulations like SEPA and the aggressive price reductions and promotion of the on-line channel make it hard to run a profitable banking business on these transactions. The fact that 80% of all sales originate from the branch network is often forgotten from these branch bashers.
A simple analysis of the big four banks give no indication that the branch network is a liability to the customers or the shareholders. On the contrary, there is correlation between the number of branches and Customer Satisfaction and Return on Equity:
So, please, let us base or business development in the banking industry on facts rather than cheap semantics and start working on improving the customer experience in the branch in order to ensure that we provide the support expected from the multichannel customers.