Is The Bank Branch Dead

Paul Joegriner [email protected] 240.246.5587

Is the bank branch Dead?

mailto:[email protected]


Key Trends• Branch-generated revenue growth is

becoming more challenging.• Transactions processing and customer

service are becoming increasingly independent of the branch channel.

• Customer demographics are shifting, making Generation Y and ethnic groups vitally important.

Source: Evolving Models of Retail Banking Distribution, Deloitte, 2008



The Branch Value: Customer Perspective

Customers continue to cite convenience as the number one reason for choosing a bank:

Retail Bank Selection % of respondents

– Branch Close to Home 52%– Good Service 36– Convenient ATMs 35– Free Checking 34– Previous Relationship 32– Offers Direct Deposit 24– Branch Close to Work 22– Low Fees/Charges 19– Low or no ATM Fees 18– Convenient Hours 17

Source: PSI Survey of US customers



• Does this mean having a lot of branches• Does this mean having a extensive ATM

network• Does this mean having an extensive array

of products

Questions:



Answers• The answer is a both a yes and no to the questions.

Having an extensive ATM and branch network along with 10 page menu of products does not assure success alone

• Banks should focus on:– Distribution excellence

• This drives customer choice, loyalty, and ultimately, profitability– Forward thinking

• The world is changing at a rapid pace and customer expectations the bank role is changing

– Less transactions and more on retailing• Mastering retail concepts from such success as Starbucks, Target,

and others will provide greater insight to marketing and selling bank services



New Banking ParadigmCustomer

Anywhere Anytime Anyway customer convenience

Online banking24/7 service

8 to 8 branch service365 days branch service

Instant comparison of products and servicesReduced Turn Around TimeEnriched interactivity through customized

services

Bank



New Banking Paradigm

BankRedefine

Traditional conceptsRole of the branch Business processes

Wider and more focused market reachReduced distribution costs

Cross SellLeverage customer database

Customer acquisition / retentionCredit screening and data mining

Customer



The Innovators• ING Savings

– Retail banking– Very Limited branches– E-banking– Basic Product Menu

• Commerce Bancorp– Commercial and Retail– Numerous branches– Traditional Banking– Multiple products sets

• HSBC (US banking)

– Commercial and Retail– Limited branches– “Self-Directed” banking– Limited Products



ING Savings

• ING branches:– Differentiate the

brand– Are not called

branches, they are called “Cafes”

– Creates social currency…banking is cool, very cool.



Commerce Bancorp

• Commerce branches:– Build the brand– Are the mission

statement...”Building the Brand one brick at a time”

– Unconventional• Opened seven days a week• Hours based on working

class people• convenient banking



HSBC USA

• HSBC USA branches:– Provide Niche

services for Cosmocrats

– Provide Straight-Thru banking for ‘Self-Directed’ customers



The theme among all three cases

• Demand for non-traditional Service

• Automation of Services (for customer needs, not for bank needs)

• Emphasis on Customer rather than Product



Branch as a Multi-Channel PlatformThe branch represents:• A significant opportunity for changing the customer

experience;• A significant opportunity for enhancing the brand; • A platform for offering superior non-deposit offices and

e-banking services



From this…………

to this………

From Transactions to Interactions



And…Trust and Transparency

Customers outside IndyMac Bank Stanford Bank
