Branches and Self-Service

While digital transactions have taken a bite out of walk-in traffic, the brick-and-mortar branch is far from obsolete.

The branch that once captured 100% of all transactions now only represents 10% of transactions and has been impacted by various industry trends and fads.

With increasing adoption of digital and mobile channels, along with changing customer preferences, branch banking is undergoing a tremendous shift towards self-service banking.

The digitization of retail banking has changed consumer expectations in terms of their relationships with their bank and preferred channels for conducting banking transactions.

Stretching back to the 1980s, a key worry with branch consolidation has been customer attrition, or the risk that accountholders will take their business elsewhere if their anchor local branch is closed or merged with another location.

In this age of self-service channels and tech-savvy customers, do community banks still need to be investing in contact centers and trying to keep up with the money-center banks’ 24/7 accessibility? The simple answer is, yes.

Customer wait time is one of the most reliable leading indicators of customer satisfaction in retail because, well, customers don’t like to wait.

Banks frequently overpay by 15% to 20% or more on average for real estate compared to other retailers for comparable space.

Perhaps the single most important threat facing the banking industry is the fundamental change in the way consumers and small businesses use branches.

As branch traffic continues its decline and branch costs march upwards, community bank executives are often tempted to sell or close branches.