The purpose of the branch is customer acquisition, product sales and customer retention. Historically transactions were the drivers for branch traffic and provided the opportunity for sales and service interaction. Financial institutions are trying to drive transactions out of the branch. As Brett King correctly highlights 'banking is no longer somewhere you go, but something you do'. It used to be the case that every banking activity required the customer to go to the branch to start any process. Call centres reduced this need and internet and mobile banking have accelerated the transition for assisted to remote self service. Like the butcher, baker, candlestick maker, accountant or financial advisor there is still 'somewhere to go' if the customer chooses to or needs to.
Branches form a key part of many financial institution’s sales strategy. It demonstrates a local presence and provides a format where the financial institution can use all five senses to influence a purchasing decision. Financial Institutions historically had large format branches to cater for the volume of customers, staff, devices, paper files etc. Branches were designed to show a strong presence with the belief that a large stone building demonstrated a solid reliable financial institution. The branch formats have been evolving over the last few decades in an attempt to meet the changing needs of customers. Anyone who has ever watched a TV show about buying a house will know that it is all about 3 thing: location, location, location. Financial Institutions have some broad categories to choose from when selecting the type of location for a branch.
Standalone Main Street
High profile, great for branding
Good passing footfall
Close to work for many customers
Standalone Suburb
Provide drive-in banking
Cheaper rents
Close to home for many customers
In-Store
Shared services for parking, maintenance, facilities, security
Access to partner customer base e.g. Walmart
Pop-ups
Enables targeted events, seasons e.g. college start, community events
Low cost, fail fast test of locations
There are many other factors including the size of the branch and the mix of self service and assisted technology that are important to branch network design. As many customers use their branch as a safety net for obtaining the required service, the location and visibility is important to provide customer confidence.
It is possible that you have a branch network where all of your branches are in the wrong locations. The most successful financial institutions may actually close all of their existing branches and open a smaller network of branches in the right locations.
