The role of the branch -- its significance in a multi-channel strategy, the functions it should perform, the appropriate level of investment in this channel -- has been a favorite topic of discussion in the banking industry for more than 40 years. From the introduction of the automated teller machine (ATM) in the late 1960s to this week's announcement from TD Bank that it would extend deposit hours to 8 p.m. Monday through Friday to make funds available for withdrawal the following business day, banks continue to search for the perfect combination of service, features, staffing, location and efficiency. It's a debate that swings pendulum-like from predictions that the branch is in decline and should be scaled back, to forecasts that branches will be more important than ever and should be expanded.
I've seen this seemingly contradictory and unproductive branch strategy in my own town of Hoboken, N.J. For years, both big banks such as Citi, Chase, HSBC and Bank of America and smaller, regional banks such as Valley National and BCB Community Bank aggressively opened banks in "The Mile Square City." At one point a few years ago, six new competing branches opened within a one-block radius of my apartment. But in the past year, many of those branches closed, including the HSBC and Valley National branches; the Wachovia branch is of course now Wells Fargo; and it's frozen yogurt shops, rather than branches, that are opening at a fevered pace in Hoboken.
But today I think it's less about a decline in branches than a rethinking. Yes, there may be fewer physical locations -- but many of those that remain are going to be testing grounds for a new approach to consumer banking. As BS&T has reported, a growing number of banks are exploring the potential to make branches the locations of choice for education, consultation and interactivity, rather than purely transactional, as they move into a customer-focused "post channel" world. The image gallery featured in today's newsletter showcases some of the technology that could facilitate this transformation.
There have been at least as many predictions over the years regarding the design and functionality of the proverbial branch of the future as there have been shifts in strategy about branch expansion or retraction. It will be interesting if this new generation of consumerization-influenced technologies truly force a change in direction.