The future of consumer banking contains fewer and different branches, according to a new report and a CUSO executive.
According to the firm’s data, banks have closed a net 1,343 branches since the fourth quarter of 2012, with SNL blaming the shift on more mobile and online transactions, and an increase in bank mergers.
The report did not include the popular prediction that branches will vanish as a transaction and business channel, but did suggest they would continue to evolve.
“We definitely don’t see the trend ending,” said Tahir Ali, research analyst for SNL and one of the report’s authors. “It might slow down or speed up, but as mobile technology continues to become more available, we expect the need to use branches to conduct routine transactions to decrease.”
But as branches decline in importance for routine transactions, Ali explained the firm believed the branch would continue to evolve into spaces used more as marketing centers or consultation spaces.
“There will always be transactions people want to conduct face to face,” Ali said, either because of their complications or because they need an immediate result. He also noted that many people still feel more comfortable discussing loan options and filling out loan applications in person than they might at a kiosk or over the phone.
Sarah Canepa Bang, chief strategy officer at CO-OP Financial Services, agreed with the report.
She said CO-OP Shared Branching had recognized both trends.
Canepa Bang observed there had been an overall trend of fewer credit union branches as well, with the number of credit union branches dropping from around 19,000 in 2001 to roughly 14,000 last year.
But she also noted that CO-OP Shared Branching had been working within both trends, to prepare for when some branches become little more than transaction centers and help credit unions use the shared branching channel to meet other member service needs through call center support and kiosks.
“Credit unions aren’t closing their best branches,” she said. “They’re closing the ones where they are losing money, but they are also turning toward kiosks and other approaches that can help meet their member needs, particularly for more routine sorts of transactions.”
Canepa Bang pointed out that FSCC had launched a fleet of kiosks before the merger with CO-OP, as had other shared branching networks. She added that she was pleased CO-OP had maintained the approach.
She also questioned whether or not credit unions would end up having to launch specialized stand-alone branches, or whether technology would advance enough to allow virtual meetings to provide the in-person discussions members might want.