UK banks look to expand branch networks

UK banks look to expand branch networks

Lack of investment in wireless and Internet-based technologies could de-rail UK bank branch modernisation plans, says BT, which has surveyed banking executives about their high street investment strategies.

The survey, which was conducted by the Economist Intelligence Unit (EIU) on behalf of BT, found that retail banks intend to increase the number of branches in the next three years to better serve and promote high value products among customers.

EIU says between 1995 and 2003, banks in the UK closed nearly one quarter (22%) of their branches. But now nearly half of the 190 banking executives interviewed for the survey say their firms intend to increase the number of branches in the next three years, with one in five saying investment will increase in this area by more than 20%.

The research found that this change is driven by banks' desire to modernise high street branches. More than seven in ten (70%) of those banks questioned intend to automate some transactions that were previously handled by employees - such as deposits, withdrawals, transfers, amendments to standing orders. This will enable firms to reduce overall headcount and free up the remainder of staff to act as specialist sales agents able to sell high-value financial products and services.

But only 28% of respondents have, or plan to introduce within the next three years, remote access to allow experts to carry out consultations with clients via the Internet or video links. Similarly, only 13% have started using wireless terminals, which enable staff to serve customers anywhere in the branch.

Emile Sanchez, MD, BT Global Services finance industry solutions, says the future for retail bank branches clearly lies in turning employees from tellers into profitable sellers, but technology needs to be at the heart of this strategy.

"For employees to provide the level of expertise and customer support needed to make high value services sales, the best technology is going to be vital for both interacting with customers and providing an efficient way to re-train staff," says Sanchez.

UK banks Alliance and Leicester, Abbey and Halifax both plans to open new branches in the UK in the next few years, while HSBC is extending its commercial banking network with 80 new business centres.

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