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October 01, 2009


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Das ist eine geballte Ladung Bockmist!

neil burton

how the world has changed, in just a year...

Chris Skinner

@Volksbank my German translation implies your comment was: "what a load of old b******s"

@Neil and @Volksbank

Don't misinterpret what I write as there's a key opening line: "Branches are not dead".

I am not saying banks should close all branches ... just that they should rethink and only keep open the ones that provide a sales store. All transaction centres - 80% of most banks' branches - should be shut down and replaced by automated lobbies / minimal services.


Ubiquiem Blogger


provocative as usual and I would mostly agree. I guess for your presentation it is a case of 'you had to be there'! but I think the thing I am most unsure of is the notion that we need to re-invent branches as '21st century sales centres'.

Sure, branches need to move with the times and since we're in the 21st century your comment is arguably a needless truism - here is the problem - the not-yet-banked (Gen Z if you like) are not going to use branches, period. Not to buy, not to transact. They don't have to. Increasingly, straight through on-boarding (customer acquisition with no physical presence required) is a reality in more and more jurisdictions. Gen Z don't buy music in music stores, they don't buy books in bookstores (ok - as a generalisation). As a generalisation therefore, they won't use bank branches to bank.

Most banks seem to have failed to grasp that the key is not to spend time working out what to do in branches (e.g. 'sell' not 'transact' - that is just an operational cost reality) but instead: Who will branches serve in the future? Certain segments of the population will prefer a physical point of presence others (most, I wager) will not. If you align the branch proposition with the consumer, you'll meet with some success - if you don't you won't. Sounds simple but I don't see banks doing it.

I'm especially wary of banks that build 'high-tech' branches. Maybe it fools the commentators and the stock analysts but it seems to me a 'showcase for the absent'. I much prefer the honest approach of Metro Bank or the upscale segmentation of North Shore Credit Union in Vancouver.

That's why Metro Bank's approach is not a contradiction (@Neil) - they won't publish volumes or segmentation data but I'd bet that it isn't 18-21 year olds, but rather Mums who expect to be passing branches (sorry, 'stores') at least once a week. Oh, and some 'switchers' incensed by the perceived general retail banking malaise that have bothered to get off their backsides. I suspect that was the segment they were going for in the first place so their challenge is not whether stores are needed but whether the chosen segment represents a big enough franchise.

As an aside, there is an interesting transitional dilemma - and that is that if you ask Gen Zers what prompts or will prompt them to select a bank they will rank branch network or proximity to branch as a key (top 3 usually) factor. So they 'value' branches (perhaps because they are a reflection of brand?), but they don't intend to use them!

But then again, successfully dealing with dilemmas and paradoxes is what building a successful strategy is all about and I wholeheartedly agree that retail banks that fail to adapt are in for interesting times!

Jonathan Charley

Branches continue to be absolutely central to the majority of customers. One of the problems is that commentators (like mayself) are not typical bank customers and while we might be avid social media and internet users, the vast majority of the population are not. They still want to be able to visit branches and speak to a real person who gives them advice. For all the flashy technology and the free dog biscuits that are now available in the branches, the real differentiator is the people and a fundamental change to the culture in banks is required as articulated in my recent blog: http://www.itsafinancialworld.net/2011/01/why-leadership-of-banks-needs-to-change.html#

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