Wednesday, October 01, 2008

The end of Bank branches?

A recent report out of New Zealand made for interesting reading. According to the local media transactions at ANZ conducted at branches have fallen 23 per cent since 2003. according to the report this is because of simpler processes, fewer forms, more use of call centres and more use of Internet banking. (Read more here). This is contrary to many papers and reports that seems to indicate the opposite (for instance here).

Question is, who is right. All these reports or ANZ's findings. My view is that most of the reports are based on US data, which is not applicable in many markets. If I just take myself and how Internet and Mobile banking changed my behaviour. I definitely visit bank branches significantly less than I used to in the past. However, I do much, much more transactions than I used to. Bank branches also started changing in what they do. In the past branches were a place where one did financial transactions (deposit money, change a cheque etc.) Nowadays they have become support centers for electronic channels. If I look at my local branch, the help and info counter personnel work much harder than the tellers.

Of course, if the measurements of ANZ were accurate this trend would surely be accelerated by the take-up of mobile banking applications, especially if these applications were well designed and clear in its objectives. Also, if this trend is truely the case, then surely mobile banking business cases can claim the savings that can be realised in closing branches. This would make mobile banking business cases a "no-brainer".

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