Have you noticed how empty bank branches are, sometimes with more staff than customers and huge empty spaces as technology impacts on the way people interact with their physical bank branches? Many architecturally-interesting banks are now trendy restaurants and bars. So much can be done on the internet today that the one of the few reasons to go in to a branch is to pay in the occasional birthday cheque. Soon even that need will disappear when it becomes possible to pay cheques via mobile phones, while Visa hopes to add contactless payments to iPhones by next year in the UK.
CityAM today report that many branches could close over the next two decades under the incendiary headline “Bonfire of the Branches”.
Banks report that online and mobile transactions have been increasing while branch visits have been falling. Deutsche Bank analysts estimate that within a decade a bank could serve the whole UK with just 500 branches, rather than 1,000 to over 2,000 which each of the big four banks operates today. This means these four banks could lose 4,850 branches. Currently there are around 10.000 bank branches across the UK, so the effect could be disastrous for the high street. Meanwhile, banks with few or even no branches, including supermarkets and HSBC’s digital First Direct brand, have been the successful in attracting customers.
This report however is at odds with another in April last year by brand consultancy Bancography which suggested that there was a long term future for branches, but that they needed to change and adapt with modern technology to remain profitable. It was of the opinion that that new technology had not replaced the branch but given them a different role as advice and help-centres, increasingly popular with customers as their financial lives and technology becomes more complex with age.
So what is the future of the bank branch? Will the current model become extinct, or will is evolve into something new and different, like a butterfly? In many bank branches in the US, customers are offered free refreshments and soft seating while they wait, but most are still unmistakably bland corporate bank branches. There are however examples of much more imaginative designs. One innovative new idea is the “Financial Spa”, a branch of the North Shore Credit Union in Vancouver, Canada:
“After being met by a concierge as you step through the door, you can help yourself to a cappuccino and a hot towel, and dispatch the children to the Kids’ Zone while you relax by the granite rock garden fountain. There are displays of local artists’ work and among the aromatherapy candles, you can discuss loans and insurance in what the credit union describes as a “cosy, semi-private lounge” with soft music playing in the background.”
The bank branch of the future may also see the digital world come into the branches, rather than replace them. There is still a demand for branches and isolated communities without any branches often feel left out.
Many years ago Abbey National worked in partnership with a coffee chain inside its branches. Branches represent a huge real estate potential for the banks. Coffee shops are now entrepreneurial hubs with mobile workers transacting business in comfortable surroundings. It doesn’t take a large leap of imagination to see a transformation and change in emphasis for the bank branch of the future – perhaps with banks being coffee shops and social entrepreneurial hubs where the emphasis is on coffee and financial advice and support, with video and digital links to other parts of the bank. Which UK bank will be first…….??