Many members of the financial services industry – particularly those that are heavily invested in digital and mobile banking – will claim that the bank branch is an outdated, soon-to-be obsolete concept.
But is that really true? We’ve certainly seen an accelerating rate of branch closures in recent years.
In the US, the likes of Bank of America, Citigroup and JPMorgan have shut down hundreds of branches over the past year, while major financial institutions like Royal Bank of Scotland (RBS), HSBC and Barclays have done the same in the UK.
However, there are some that are bucking the trend, such as Metro Bank, one of the UK challenger banks that is offering an alternative to the established providers.
Metro, which describes itself as “the bank that’s all about you”, is planning to open up to 12 new branches – or “stores” – in 2017 and dozens more by 2020. The outlets will stay open late, seven days a week, and will have unusual features ranging from coin counting machines to dog bowls.
This is one of the ways the firm is working to distinguish itself from the big names in the industry.
Founder and chairman Vernon Hill told Business Insider: “You can’t look at Metro through British bank eyes, because we’re nothing like RBS or Lloyds. What we really are is a growth retailer that happens to be a bank.”
Rather than agonizing over how to manage branch closures without alienating and losing customers, do banks need to take a new approach to the branch experience and how they engage with people?
In an article for Bobsguide, William Weidman of Applied Predictive Technologies said banks will need to make “substantial course corrections” to their branch networks if they want to “survive and thrive”.
He recommended looking at the branch as a forum to enable conversation between the bank and its customers, rather than simply as a place to complete transactions.
Whatever happens with closures over the coming years, it seems clear that the branch network is one key area where banks can and should be considering major change.