Recently the ABA released their consumer survey that trumpeted the continued growth of the online channel, putting it ahead of the branch for channel preference. Those who are ready to turn all bank and credit union branches into strip malls and coffee shops, hold your horses. There are many reasons and facts why branches continue to live on and will be integral going forward for successful institutions. Here are a few of my top reasons.
1) When it comes to opening an account - the branch is preferred by 8 out of 10 consumers.
IDC Financial Insights has been measuring consumer preferences for over 4 years and each year the number remains about the same, 75-85% of our respondents said that their preferred method for opening up an account is at a branch. Even the coveted Gen-Y / Digital Generation demographic knows the importance of having a branch available.
2) The branch will serve as an important multi-channel fulfilment point going forward.
Starting a transaction through one channel (online, mobile, ATM, etc) and completing it at a branch makes sense. If I need a money order for some odd reason (it happens) and remember while I am having lunch, would it not be great if I could simply start the process of obtaining my money order through my mobile phone and limit the amount of time I need in the branch?
3) Video continues to make great strides and may in fact become the standard communication tool in most branches.
Having an insurance or investment specialist cover five branches is hardly convenient. Instead, having video capabilities where individuals can immediately connect with a specialist at any branch while having the specialist available by video, whether in a call centre or some other location, makes sense.
4) Video will also assist with foreign language barriers.
As the US population continues to become more diverse speaking various languages, having tellers available to speak native language to customers will be not only appreciated, but will assist in developing long term relationships.
5) Small business owners will no doubt benefit greatly from remote deposit capture.
While this may cut down on their daily deposit runs to the branch, it does not mean that they do not need a local branch. Branch managers and small business owners usually get to know each other, whether it is through Chamber of Commerce meetings, coaching youth athletics or just walking around town. That relationship will often lead the small business owner to look towards that branch manager for lines of credit, cash management tools and possibly expanding personal relationships.
6) We have seen a continued increase in the number of transactions across all channels.
But, as financial institutions continue to offer new channels, this does not mean that older channels go away. I can recall only one type of service that was introduced and subsequently replaced by newer technology: fax banking. Fax banking, for those who do not recall, was a method of delivering account information every morning and faxing it to the appropriate business owner. Are there other technologies that you can recall that have been replaced?
Let me know what your thoughts are. Is the branch dead or is it alive and kicking.