Future of bank branches and recent news from BofA

Posted by on Fri, July 31, 2009

By now you’ve most likely seen all the articles written about the statement made by Ken Lewis, Bank of America’s president, that the likelihood of their branch network being reduced by 10% is high.  One publication you might have heard of, Wall Street Journal, claimed that this was what Lewis actually said.  But in fact, reports now show this figure was brought up by a reporter on the call and was not a number Lewis claimed is real. 

Given all the initatives that fall off the table within banks, I wouldn’t be the least bit surprised to see BofA’s branch network grow versus shrink over the next few years.  However, this “hyped” story does bring about an interesting topic.  Just what is the future of a bank branch? 

The IT and online financial advocates will tell you that branches are irrelveant when it comes to the future of banking. But for banks to truly take on a new era of financial services they’ll have to make a strong case FOR the branch, not against. 

From the beginning of banking here in the United States it has always been about personal relationships.  Over time, these relationships have been harder to keep because of the technology that allows us to do bill paying and transfers right from our own home or even while on the road.  The checking and savings accounts that hold our cash to buy both necessities and toys use to draw us back to the branch on a frequent basis.  At one point, daily.  Now, with one simple swipe of the card, those purchases are made with ease.  

Thanks to credit, easy access to our bank accounts and other innovations, the bank relationship is now more a commodity where it’s easy for consumers to change brands.  On the bright side, a lot of the new gadgets come with fees providing banks with new sources of revenue.  But on the dark side, they’re losing relationships left and right at an alarming rate. 

So what’s the answer to drawing consumers back into the branch?  What kind of relationship should consumers expect to develop when entering the brick and morter?  And most importantly, how does one pull their customers into the branch when all signs put to online?

When asking yourself these questions, always remember that people in general are looking for answers, not products.  In today’s environment, products are secondary to information. Branding yourself as the place to go to get this information is easier said then done.  But once you achieve this goal you’ll find more people are willing to come see you in person.      

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July 31, 2009 | Filed Under banks, branches

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