More and more banks are announcing that they are cutting branches and reducing their presence on the high street – in the UK and beyond.
This is a trend we’ve seen across the industry of late, with many banks blaming the high costs of maintaining low-volume branches, and the fact many more of us now do our banking online, for the trend. But while it’s true that the use of online and mobile banking has jumped hugely in recent years, not everyone is enthused by this, so banks need to be wary of relying too heavily on these channels.
The need for physical branches
There will always be a steady supply of customers for whom in-person banking is a vital service. For instance, small business owners still need to make the trip to the bank to deposit their earnings, while for some individuals without internet access, the ability to drop into a branch and speak to a teller is a crucial lifeline.
This is particularly true in rural areas, where alternatives to their local branch will be few and far between. In many of these places, a branch isn’t just a place to do business, it can be the very heart of a community.
Indeed, according to the Campaign for Community Banking Services, having access to a bank brings a range of benefits, from sustaining local commercial activity, combating financial and social exclusion, and providing vital assistance to vulnerable , disabled and elderly people.
The pressure group also noted that at the start of this year, there were 840 communities in the UK that were down to their last bank, with rural market towns and seaside and retirement communities among the areas most badly affected by closures.
Transforming branches to help the community
Therefore, it’s easy to make the social case for keeping branches open, particularly if they are the last service in a community. But how can this be squared with the need for banks to maintain a competitive and profitable outcome?
Fortunately, there are ways to help, and turning to technology is a great way to satisfy these competing demands. For instance, automated and interactive services can not only help keep costs to a minimum, they can also make branches more efficient.
Self-service technology, for instance, can help reduce transaction times by up to a third. Or, if an individual would rather enjoy a more personalized touch to discuss their specific banking needs, they can connect to a live, high-quality teller via video link. This ensures banks can maintain a direct, human-to-human experience and keep a full-service branch running, while keeping costs low.
Beyond the branch
But even if a bank does conclude it is no longer financially viable to support a branch, this does not mean the business has to disappear from the community altogether. As discussed above, the availability of automated hardware solutions can offer users a wide range of the functions they’d normally have to speak to a teller for, and there’s no reason why these have to be installed only on a bank’s premises.
For instance, banks should consider looking to partner with other trusted businesses in a local area, such as a Post Office, a library, a community centre or even a shopping centre, in which multifunctional kiosks can be installed.
This can therefore help ensure that services remain available to the local community, without the need to maintain a costly bricks-and-mortar branch. Of course, it can’t directly replace the experience of being able to go into a branch and chat directly with friendly, knowledgeable staff, but when the alternative is no banking services at all, such solutions can make sure communities still have access to the services they need.