In a study of 2709 UK consumers by Deloitte & Touche, the traditional branch is used by more than 80% of all bank customers and is the preferred channel for 52% of interviewees. Importantly, the branch is preferred by 45% of customers in the more affluent AB segment of the population, and by 48% of C1 customers. It is also liked by the banks’ future potential big spenders, the 16-24 year old account holders, 78% of whom use it in preference to the Internet or phone.

The results run counter to the popular notion that sophisticated and younger customers tend to avoid branches in favour of online channels.

Nick Sandall, retail financial services partner at Deloitte & Touche believes there is growing evidence that the major banks in the UK are planning to reverse a decade of under-investment in the branch network.

He says: "Although some banks, such as Abbey National, are ahead of the game in their efforts to revolutionise the way in which they use branches to reach the consumer, we expect all banks to invest substantially in reshaping their branch networks and the activities within."

Abbey National has revamped its branch network through co-location partnerships with other high street retailers, including the Costa Coffee chain. Abbey reports that bank product sales have increased by 40% in the new Costa Coffee sites.

However, many bank branches remain ill-equipped to properly service customers and are often sited in inconvenient locations. Nigel Moden, management solutions director at Deloitte & Touche, adds: "The staff in such branches are perceived as lacking the skills or opportunity to provide good service and financial advice. Indeed, customers surveyed felt that bank staff lacked the skills, training and technology to provide such service."

The consultancy says that bank must re-position and re-purpose the role of the branch, "both in the mind of the customer, and for some banking institutions, in the thinking of senior management too".

To read the full paper, go to:

Bring back the branch