The UK's bank branches are the most crowded in Europe, serving on average over 5000 people per site - more than five times the average in Spain - according to the latest research from Datamonitor.
Although the dot.com boom and the emergence of e-banking in the late 1990s were believed to signal the death of branches, face-to-face interaction is still highly regarded by customers, who are still reluctant to use electronic channels for complex transactions like obtaining a mortgage
Despite a notable increase in e-banking - with 50 million consumers banking online in Western Europe and 11.5 million in the UK alone - electronic channels have not ousted the branch and are unlikely to do so in the foreseeable future, says Datamonitor. Branches still take the lead in business generation and many customers with online bank accounts use the Internet in addition to their branch. Despite this, Datamonitor predicts that branch numbers in the UK will continue to fall, but at a lower rate - from 11,565 in 2003 to 11,054 in 2008.
The research house says banks are refocusing attention on the branch, reinventing them as advice centres for affluent customers or financial shops for mass-market customers. Simple customer transactions and inquiries, such as cash withdrawal or balance statement enquiries are being moved to self-service terminals in order to free staff to handle product sales.
Basel Ous, financial services analyst at Datamonitor, says: "To increase the quality of advice in branches it will be key to seamlessly integrate branches within multi-channel delivery architectures, giving advisors access to all customer and product information across all channels. In doing so, they will enable branch advisors to provide the optimal, personalised service."