Electronic banking is steadily supplanting customer visits to bank branches, but few banks have thoroughly considered the consequences. Survival depends on figuring out a new service delivery model that embraces online and mobile banking and puts branches in their proper (and far less prominent) place.
While there’s no ready solution, banks can start the process with some assumptions:
You’ll close branches—a lot of them. It really won’t make much sense to have bank branches outside of major population areas. You can’t afford otherwise.
Services will move higher on the food chain. It’s time to think hard about what customers want to do—and what you want them to do—when they visit a branch. Even in full service branches, you probably won’t need all those tellers. But you may need more financial advisors and wealth managers to serve the high-value customers who demand a one-to-one relationship. And a few customer service reps to help customers solve problems, handle complex transactions or sign papers that can’t go through the mail or the scanner.
You’ll embrace mobile. Though it remains to be seen how quickly mass market consumers will embrace mobile banking, there’s little reason to think they won’t do so eventually. Online and mobile customers will cost you less in the long run, so it makes sense to understand what they want, and to come up with incentives to push as many customers as possible to use electronic channels.
You’ll integrate channels. Customers will do so much business electronically that they’ll probably accept having to drive a bit further than they do now for the rare transaction that requires a physical presence. But you’ll need to make it easy by making banking effortless across channels. For example, the customer who buys a money order online at midmorning should be able to pick it up at the branch near her office at lunchtime.
It wasn’t long ago that we couldn’t imagine checks disappearing, but consumers writer fewer and fewer of them.
Today’s full-service branch is also becoming an artifact of a less efficient past. Do you agree?