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To Branch or Not to Branch? That Is the (Wrong) Question

Apr 18, 2017

For years, financial services analysts have wondered whether branch banks are wheezing their dying breaths.

It’s easy to see why. Industry services have expanded beyond physical branches since the 1960s, when ATMs kicked off a trend toward increased automation. The advent of online and mobile banking accelerated this trend dramatically.

As the industry’s transactional aspects shift to more automated channels, the cost of servicing customers drops fast. Thanks to this efficiency, many financial service leaders pose this question: Do branches remain necessary, let alone relevant?

In the U.S., for example, approximately 5 percent of branches have shuttered over the past few years. In the U.K., more than 600 branches have closed in the past year alone. Now we even see the rise of mobile-only institutions such as Starling Bank (where the only way to access accounts is via a mobile app).

With the ubiquity of mobile phones in virtually every pocket, and mobile’s superior cost economics, it would seem the days of the neighborhood branch are numbered.

But are they? 

To learn more, read the full article in BAI Banking Strategies.

Image: The Noun Project / Aha-Soft

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