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Branch Banking for Emerging Markets

Articles proliferate when banks decide to close branches. Commentators paint a picture of transformation - that the great monoliths of old are embracing the future by tearing up their old brick and mortar footprint and replacing them with branches on wheels (, or getting rid of teller counters and replacing them with sophisticated gadgetry– either in branch or in customers’ pockets.

This is in contrast to the increase of bank branches in some emerging markets, such as the Philippines. Banks are in the midst of opening new branches, not only in the cities but they are also increasing their footprint in the provinces as well, in an attempt to reach the unbanked (as in the case of Bank of the Philippine Islands or to grow their retail network as in the case of Security Bank (   

There have been some attempts to move away from the traditional brick and mortar – as exemplified by RCBC Microbank (; however, most of the expansion has been more of the same.  Is it necessary to open a physical branch? Would it be more cost effective to have more self-service channels than to have teller counters? How can we incorporate today’s technology and veer away from the traditional branch design? 

Philippine banks can take a leaf out of the transformation happening in the developed economies. Most changes programmes address the same concerns that face any bank anywhere in the world – e.g. costs in owning, staffing and maintaining unprofitable branches; retaining people doing simple tasks that can be automated.

Since Philippine banks are expanding their branch networks, they are in a position to step back, rethink and take advantage of the benefits of the lessons being learned in other parts of the world.

A widely adopted option is self-service channels, which are secure, fast and easy to use. Keep in mind that moving people to use self-service channels requires a high level of confidence in these channels. If customers persist on going to a teller for a service that should have been handled by a machine or kiosk, you have to ask yourself why – there might be a need that these new channels do not meet.  Bank of the Philippine Islands (BPI) has successfully integrated a self-service queuing system as the starting point of all transactions requiring a teller. With BPI Express Assist (or BEA), customers input their transactions in the kiosk, get a queue number, sit and wait for their number to be called before going to the teller counter. It is very easy to use, requires little to no assistance, and it helps cut the time for tellers to complete transactions because the data entered by the customer is fed to their teller system.

Branches on wheels can be another option, bringing bank services to far flung areas where it is not profitable to operate a physical branch. As with self-service channels, they have to earn the complete confidence of customers and make it easy for customers to use and access banking services. Enabling branch systems to render on tablet devices is one way of making this option versatile for banks.

Banks will continue to face this issue for the medium term, so why not take a look at what is happening in other parts of the world and learn what to do now? Banks don’t have to reinvent the wheel.



Comments: (2)

A Finextra member
A Finextra member 23 January, 2015, 01:56Be the first to give this comment the thumbs up 0 likes

Dear Lyndsay,

what is your opinion about Video Teller Machines as tellerless mini-branches as an option to increase the bank's footprint?

They can act as self-service terminals and remote tellers and can help if the customer needs assistence. They assist in opening accounts, issue debit cards instantly for example.

Banks can place them in malls (I know that big shopping malls are very popular on the Philippines).

This is a brief overview, there would be more to discuss about this concept.

Please do not hesitate to contact me if you would like to do so.


Best regards,

Ulrich Rosenbaum

Lyndsay  Po
Lyndsay Po - Misys - Manila 30 January, 2015, 10:33Be the first to give this comment the thumbs up 0 likes

Hi Ulrich,

Thanks for your feedback.


Video Teller Machines (VTM) are an option that can be explored. They could be a great way for banks to expand their services and extend their business hours, especially for professionals like myself who can only go to my branch at lunchtime because branches are closed after work. A lot of professionals in the BPO industry work night shifts and would surely appreciate it if they could do their bank transactions before or after their shifts – when banks have already closed their doors. However it is an expensive option in terms of hardware and people – and probably should be focused on high value customer segments. This is especially so given the growth in digital banking.


VTM as a stand-in for an actual branch would depend on regulations – but could be an interesting way to handle sales. Account opening via video is a regulatory grey area. Many countries require new customers to show a couple of authorised Ids. Can these be accepted over video? It will be interesting to see if any try. 


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