A Finextra member 01 August, 2012, 15:35 1 like

Here we have a crystal clear insight into why UK high street banks cause such frustration with consumers. The short-sightedness of modern British retail banking is astounding, and it's a damming indictment of the current model that it took a customer service disaster to shift some of our biggest high street players to open at times which were far more convenient to the modern consumer. Whilst the rest of the high street has moved (slowly) into the modern world with the threat of online competitors snapping at their heels with wider time windows of operation, high street banks stubbornly refuse to shift, the only option for anyone without flexible working practices being a very unwelcome lunchtime queuing. They will also generally be wanting to see their bank about something which is going to be stressful enough without having the additional stress of wondering if they are going to get a lashing for getting back to their work late. Is it any wonder that the profile of the average branch user is becoming skewed to the time rich, and more often than not, cash poor? This is a trend that the high street needs to wake up to, and fast. The strategists among you might think that there is a plan to move the higher grossing consumers to an all virtual journey. But suppliers abandon physical paths for their consumers at their peril, and the average consumer with modest requests feels increasingly marginalised.

Brett King - Moven - New York 01 August, 2012, 19:46 0 likes

I find it ironic that the report that identifies that only 25% of 'young' brits visited a branch in the last 12 months, and yet that is the fact that is slated in the headline as a celebration of branch banking. Clearly branch banking is in dire trouble moving forward as it no longer works to provide the day-to-day banking 'service' that it was intended to.

A Finextra member 02 August, 2012, 07:17 0 likes

In Scandinavia this development of not needing to visit bank branch unless one wants to rework mortgage or talk about savings options, has taken the toll of branch visits by people aged 30 - 60. Young people (18 - 25) tend to visit branches more often since they are not yet "finacially stable" and they also can have more daytime to spend on a branch calls (students, part time workers) Almost all of the branch services can be performed by on-line banking and +85% of households in Sweden have broadband internet at home and 100% of the country  has 3G mobile and 4G is being expanded rapidly. +75% of all retail OTC payments are made with cards so cash is used mainly P2P and by tax avoiders. Banks have changed opening hours and now many branches are open until 7 pm but soon 70% of the branches will be cashless and focus on sales of loans and savings. High-street banks need to adapt and match their services to compete with on-line only banks that can price compete on standard services but cannot offer branch calls for more complex matters. The existence of a branch network has kept the customers from moving to on-line only banks who have less than 20% total market share of the consumer banking and even less on SME banking. Customers seem to value the possibility to walk into a branch if a serious matter has to be clarified. Most customers value that banks offer branches, on-line banking and telephone banking. All three channels are seen as neccessary by the majority of bank customers. On-line only banks tend to get only niche services like stock trading while the current accounts, bill payments, debit cards, mortgages, pensions and savings stay with the "brick-and-mortar also" providers.

Brett King - Moven - New York 02 August, 2012, 07:24 0 likes

I agree wholeheartedly that there is a service element and positive psychology to having some high street branches, however, the clear economics of customers NOT visiting branches (as data is showing us in droves) surely means the reality is that we'll end up with much less of them.

The argument is not for a branchless world, but a less-branch world. By 2020 when half of the retail banking audience are Y-Gen/Digital Natives who have grown up on access all the services they require digitally, even the old security blanket psychology/argument for the branch may be unsustainable.

A Finextra member 02 August, 2012, 08:22 0 likes

Dear Brett, Yes this culling hass already happened - my bank used to have more than 1 000 branches and they are now down at 400. Staff reduction in the same time from 14 000 employees to some 6 000 since 1997, all according to their annual report. Same thing in other service sectors. The Swedish post office used to have more than 500 offices - now they have less than 100 and are still cutting. On top of my mind - I do not know the location of any of these offices. My postal services are managed by a retail store close to me. Perhaps banks also outsource cash handling to retailers, in smaller communities in Sweden this is already taking place, deposits and withdrawals can be made in the local grocery store...

Matt White - Finextra - Toronto 02 August, 2012, 10:52 1 like

In his 19:46 comment, Brett King states: "I find it ironic that the report that identifies that only 25% of 'young' brits visited a branch in the last 12 months, and yet that is the fact that is slated in the headline as a celebration of branch banking."

No Brett, you're wrong on two counts:

1. A quarter of respondents have visited a branch only to find it closed.
2. The closed bit is in the headline – hardly a 'celebration of branch banking'.

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 03 August, 2012, 11:04 0 likes

If this is the situation in the UK where many banks - at least both of mine - are open on Saturdays, I don't envy customers in Germany, a few other countries in Continental Europe, and in many parts of the US who have access to their banks only for five days a week. This report doesn't talk of another big problem where customers seeking face-to-face assistance to resolve a particularly knotty problem take the time out to visit a branch when it is open but are directed by bank staff to Phone / Internet Banking kiosks inside the branch.

A Finextra member 07 August, 2012, 09:49 0 likes

So 25% of young Brits in this survey say they have visited the branch only to find it closed. What percentage have visited the branch and found it open then?

Clearly the branch still has a future, and the branch and call centres have a long way to go in terms of their service. The survey findings should not come as a great surprise however, the banks should be monitoring online SMN to gather information on their points of weakness but the question is how willing are they to change?

Faced with large fines, liquidity regulations and increased competition investment considerations will be internally scrutinized. What is the cost of opening the branch network for an extra two hours a day, or seven days a week - and what is the revenue and profit potential? Are the banks happy to ride the storm of critiscism and not risk bonuses by increasing costs?