Why Bank Branches Still Matter in a Digital World

Bank branches are still a critical resource for financial institutions, despite the meteoric rise of online banking.

Find out why bank branches continue to generate revenue and how you can optimise your branch portfolio for the digital age.

Why bank branches still matter

69% of the British public still think having a physical bank branch nearby is important, while just 32% would consider using a bank with no branches whatsoever.

A bank branch in a town/city centre is likely to increase overall market share, irrespective of how many customers visit – they just want the assurance of knowing it’s there.

Banks are an essential consultative asset for customers, with half visiting a branch once per month for major transactions while completing smaller tasks online (TSB).

People inherently like dealing with other people. 63% of the public prefer speaking to someone in person before making a major financial decision (SMF).

The importance of a branch is determined by local demographics. Areas with high numbers of people who cannot, or prefer not to, adopt digital banking might well see visitors returning more frequently.

Additionally, you can gain a wealth of local market knowledge from a physical branch. Analyse your data to identify local trends and collate anecdotal information to increase profitability.

Local knowledge is crucial to branch success

Bank branches remain a critical asset. However, the overall number of customer visits has fallen by more than 40% since 2012.

In the past, you would have opened multiple identical branches across an area to give customers access in the places they live, work and shop.

Now, the prevailing model is one town/city-centre branch with a diverse array of services acting as a central hub for customers to visit in the same trip as picking up the shopping. However, this model will probably require a degree of branch repositioning.

These are the most important location-related factors to consider when repositioning your branches:

Travel times

Your branch needs to be within convenient travelling distance for a large share of your local customer base.

Identifying the site that’s most accessible for your customers requires a tool that can plot all your customer and branch locations, then automatically generate estimated travel times.

Service diversification

You’ll also need to think about adapting branch design and diversifying services for local markets.

Retailers (especially supermarkets) already have a good grasp of this concept, with ‘express’ convenience stores refined to match local preferences.

You need a tool that combines local demographic data with your own sales records and competitor data to predict the services and layout most likely to draw customers in.

This data set can give insight into factors including whether:

  • Local customers prefer traditional or contemporary design
  • Customers prefer multiple cashiers to self-service machines
  • Additional rooms/booths for private customer conversations are needed
  • Partnering with another service (such as parcel collection) would increase footfall
  • Biometric and other technology would be a help or a hindrance

The tool that can tell you all this and more is Periscope® – an innovative software system from Newgrove. Make the most of your data and modernise your bank branch portfolio with this intuitive location intelligence programme.

Discover how Periscope® can help you optimise your portfolio of bank branches to increase revenue generation. Call our expert team and arrange a demo today.