Banks shut branches amidst continued customer demand for face-to-face service
New York, 2.17.17: America’s biggest banks are closing hundreds of branches. PwC reports expectations to see at least 20 percent fewer of big bank branches by 2020, as banks adapt to the growth of digital services. Yet despite the importance of online banking, the majority of customers still prefer face-to-face services when seeking advice on major financial transactions. Closing bank branches is an attractive option to manage cost pressures: the traditional branch costs roughly $2-4 million to set up and $200,000-400,000 per year to operate. However, banks are finding a middle-ground which enables them to preserve in-person services on a sustainable model. Technology innovations are tackling this problem head-on, with radical new business models supported by next-generation tools.
One development is an Uber-like scheduling tool, Radius, which enables banks to manage a mobile workforce of advisers who can respond to customer demand.
Bhupender Singh, CEO of Intelenet® Global Services comments: “Although there is a rise in online banking, with fewer customers opting to go to branches, banks need to be strategic in the way they accommodate customers. Not all customers want to go solely online for the handling of such sensitive information. This is where banks can look to be really distinctive in the way they harness technology to direct financial advisers to customers’ doorsteps.
“Banks currently have the advantage of an established customer base. It is the in-person expertise that continues to set banks apart from their newer fintech competitors, enabling them to remain distinctive.”
Bhupender continues: “The value of relationship-building which comes from providing in-person service shouldn’t be underestimated. The future of banks as a whole comes down to the trends in customer demand which must be the driving force behind business strategies and technology adoption. Developments in mobile technology are driving customers to interact with banks in numerous ways, which means the need to integrate an omni-channel strategy that accommodates all customers is ever-increasing. Banks should offer a blend of online and in-person banking that complements traditional services.