Reporting from the Celent's Banking event in London

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3 February 2011


  • The only people who argue that "branches are dead" are those dwelling on the transactional side of financial services only. While they may be right -- transactions seem to be migrating to online/mobile channels -- that does not mean that "branches are dead" (or even dying). People do a lot more at branches than just conduct transactions.

    Think about it this way. If a branch has 20 FTEs, how many work as tellers? Maybe 10-12? What do all those other employees do? Just because transactions migrate out of the branch doesn't mean all the other activities will follow right along.

    Online/mobile may take the tellers out of branches... Branches may get smaller... We may have fewer branches... but there will be branches in the foreseeable future.

  • Celent’s multi-channelled themed event “Branch is Dead; Long Live the Branch” certainly threw the gauntlet to the two competing speakers – Steve Townend, CEO and co-founder of MoBank and Anthony Thomson, co-founder and chairman of Metro bank – to challenge each other on the branch versus branchless banking debate.

    There’s certainly an argument for both. Branchless banking helps banks to reduce administration and operational costs, plus the internet and mobile are the channels of choice for the younger generations so it makes sense to create a platform to accommodate this audience – now and for the future. However, as pointed out by Bob Meara, a senior analyst at Celent, branchless banking is quite limited today with the focus being on self-service. The strategy needs to evolve to take advantage of web 2.0; so banks should engage in dialogue with their on-lines audience to fully understand what customers want from their banks and to scope the services accordingly. This approach will empower banks to cross and up-sell to its customers and innovate the way it does business.

    The demand for branch-based banking isn’t as high as it used to be as people have alternative channels to turn to. However, a typical buying cycle is that a person does their research on line, then they look to others who are an authority on the product for an opinion and then finally, they engage with the retailer in person, if possible to make the purchase. The reality is, people want to use the internet and their mobiles as a channel to do their banking, but typical buying cycles and human nature dictates that people still want to have human contact.

    To succeed in the 21st century, banks will need to ensure they have the human footfall for customers to engage with if necessary and the digital touch points and channels available so customers can do their research and manage their banking on line if they want to. The Royal Bank of Canada recently launched a store oriented branch, which accommodates the best of the digital and branch world – is this the best way forward?

  • I completely agree with all the comments. While our event title was deliberately provocative, no one at Celent believes that the branches are dead. It's not a question of 'either/ or' - all channels will co-exist, and they will continue to evolve. As discussed during the event, branch formats are undergoing a transformation and online and mobile channels are starting to offer richer customer experiences. The challenge for the banks is to direct an appropriate levels of investment into each of those channels and to ensure a consistent and seamless customer experience across all of them.