Have you ever met one of those people who causes you to momentarily question your entire way of looking at the world? An out-of-the-box thinker whose ideas sound radical, yet plausible enough to make you wonder if the things you've always known to be true actually are?
That's the effect Brett King had, at least temporarily, on a ballroom full of bankers at the start of our annual forum on retail financial services. With persuasive data on the changing habits of consumers and keen observations about the power of digital media, King set the agenda for the rest of the event with his forceful case that branches are on their way out-something he hopes to prove (and perhaps hasten) with Movenbank, the all-digital direct bank he plans to beta-test this summer.
King predicted that three years from now, mobile banking services will be used by 70 percent of Generation Y, and the kids presumably won't share older folks' hang-ups about managing every aspect of their personal finances in the ether. "Banking for them isn't a place you go. Banking for them is something you do," King said, putting his bleak forecasts for things like in-branch transactions-which he says will have fallen by half from 2006 to 2015-into a broader, behavioral context.
The atmosphere in the room was charged as King left the stage. There was audible tut-tutting from the naysayers, but also an exchange of apprehensive glances from some audience members, who possibly were rethinking the life expectancy of a career dependent on the future success of branch banking.
For those who doubted King, and even for those who believed him but were made uncomfortable by his conclusions, a welcome reality check came quickly in the form of Ray Davis, the president and CEO of Umpqua Holdings, who immediately followed King on stage. Davis mainly offered up the standard CEO platitudes about building a culture, serving customers and modeling the success of retailers like Apple. But the audience seemed transfixed nonetheless by what Davis had to say, perhaps because Umpqua has been so darn good on executing on all of it, and perhaps because after King's harrowing look into the future, it was comforting to hear from someone who still believes that branches are a viable play long-term.
"If I am a banker, I think that the best way to generate as much business with you as I can is face to face," said Davis, whose Portland, Ore., institution deservedly prides itself on its cheerful staff, devoted customers and sharp-looking branches that are more than happy to host the occasional community yoga class. Davis' speech would have seemed to end the branch debate right there, with most of the crowd seeming to agree on the continued importance of bricks and mortar, especially as destinations for troubleshooting or consultative selling. Yet the question of branches arose over and over for the next two days. Nearly every keynote speaker and panelist touched on the topic, and after conference hours, the subject was the perfect premise for striking up conversations with old acquaintances, or even strangers. "So, are we all dead yet?" was one of the more macabre greetings, though hardly the only one, overheard in the Mediterranean-style outdoor walkways connecting the conference center to the main hotel.
Closely related to the topic of branch utility is mobile, a logical successor to bricks and mortar as the venue for many of the transactions currently taking place mainly at the branch. But while mobile may feel like the right place to invest, many conference speakers and attendees said they still have trouble making a proper business case for it-just one more example of how difficult it is to manage retail in a multichannel world.
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