The debate about the future of branches may continue to rage, but one fact is coming into sharp focus: People just are not going into branches anymore, at least they are not transacting.
Proof is the latest teller line transaction survey by Financial Management Solutions Inc., which now documents a 45% drop in teller transactions over the last decade.
The data is drawn from core systems in community banks and credit unions. FMSI is an Atlanta-based provider of teller management systems with a client list that it said includes about 115 credit unions.
The Death of the Branch
- Day One: Amazon, Apple, Kindle light the fire under e-commerce.
- Day Two: Changing consumer behavior drives down branch use, profitability.
- Day Three: The inevitable end of bricks-and-mortar branching.
“We are in a unique position in that we have access to more than 17 million monthly transactions from many different financial institutions,” said W. Michael Scott, president/CEO of FMSI, in a press statement. “Our Teller Line Study compiles this valuable information and presents it in 20-year trend charts, allowing the analysis of industry branch traffic at an aggregate level.”
In 1992, the average monthly branch teller transaction total amounted to 11,700, per FMSI. Today it is about 6,400.
In 2002, FMSI numbers found around 9,900 teller line transactions per branch per month.
FMSI pointed to the rise of alternative banking channels – such as mobile banking, mobile wallets and video tellers – as a cause of the drop in teller transaction volumes.
Another, intriguing factoid from the report: “The ratio of population to branches has declined from 9,340 in 1970 to 3,683 in 2008. This staggering metric is a result from a nearly 300% growth in the number of branches while the population growth was nearly half of that.” Plainly put, per FMSI research, the U.S. has become increasingly over branched.