Is there a future for bank branches?

Originally published on Billing Views

A few weeks ago my local branch of HSBC received a major refurbishment. What intrigued me about this is that in our increasingly technology centric world HSBC still thinks it’s worthwhile spending money on its branches. As a customer who will do everything I can to avoid stepping inside a bank, the idea that banks are spending money on branches rather than enhancing their mobile and web engagement is horrifying! Every time I visit a bank it’s because the task I need to carry out isn’t, but could be, available online. 

The banks have yet to understand that branches are only one part of a distribution strategy. They have mobile apps and online banking but these still operate as adjuncts to the core branch; some banks have poor online implementations and some have completely ignored the mobile market. Metro Bank is building its business around the branch, with no mobile apps (the iOS Metro Bank app is for a US bank!) and a limited online banking platform. Marks and Spencer (via HSBC) has focussed on branch banking in its stores. Both Santander and Co-op were excited about buying branches from RBS and Lloyds respectively, until they ran into problems. 

In my home town we have five banks in spacious, under-utilised premises. In the same way as mobile operators share infrastructure so the banks should share branches. Rather than continue to close branches, site sharing would enable cost reduction without depriving communities of physical access to banking. 

If banks want to continue to be relevant to consumers they need to move the heart of their engagement from their legacy infrastructure to the consumer and let the consumer engage via the device they always have with them – the mobile phone. Many of tomorrow’s customers will see bank branches as irrelevant as phones tethered to the wall. 

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