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Branches crucial in customer recruitment and retention, RBR says


Alex Maple, Senior Research Analyst at RBR

Alex Maple, Senior Research Analyst at RBR

Branches play a critical role in customer recruitment and retention, despite record adoption of digital channels, according to an RBR analyst speaking at the Branch Transformation conference in London.

According to Alex Maple, Senior Research Analyst at RBR, who held a keynote at the London conference, banks must focus on reshaping branches. This is because most customers still visit branches, even if less frequently, branches near home or work play a key role in the selection of primary checking account provider, and they are critical for product sales and cross-sales.

“Banks need to reshape the branch channels, raising transaction efficiency and sales effectiveness, while simultaneously enhancing the customer experience,” Maple said. “The purpose of the branch is the key question.”

Maple noted that banks are seeing record adoption rates for new digital channels, a fall in the frequency of customer visits, and branches account for a major share of fixed costs.

The use of technology to automate transactions is linked to the wider process of branch transformation, he continued, such as a number of transaction automation tools. Future solutions will include assisted self-service in-person and over remote video, teller automation such as teller cash dispensers and recyclers, and self-service automation – for example, recycling ATMs.

“The number of ATMs shipped over the last few years has gone down, and cash dispensers, in particular, have gone down – but what we see is that the number of recycling ATMs and the number of automated deposit ATMs overall is actually going up. And 2018 was the first year in which the number of recyclers was actually greater than the number of cash dispensers. So, you can see that globally, banks are rethinking the ATM,” Maple explained.

PODCAST: Ep.13: Mark Aldred, Head of International Sales, Auriga, at the Branch Transformation conference 

According to RBR research report Global ATM and Market Forecasts to 2024, the number of bank branches worldwide has increased by 0.9 per cent over the past 10 years, from 968,000 in 2008 to 1.06 million in 2018.

Maple explained that the Asia-Pacific region has seen a 42 per cent increase, and the Middle East and Africa has increased by 40 per cent. However, Central and Eastern Europe have seen the numbers drop by 30 per cent, Western Europe has closed 26 per cent of its branches, and the Americas has dropped by 2 per cent.

At country level, India has grown by 110 per cent and Turkey by 25 per cent. However, the US has seen a -14 per cent change, the UK -35 per cent, Spain -43 per cent and the Netherlands has closed over half its branches, with -56 per cent.

“This isn’t just about transferring transactions from branches to the mobile channel. In the Netherlands, for example, there is a much greater sense of a cashless society and more electronic payments,” Maple said.

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