There seems to be a fairly radical disconnect when it comes to attitudes about the near future of branch banking. Analysts say banks need to start investing in the self-service future, but bankers profess en masse to have no plans to do so. If banks boycott the self-service future, will it still arrive?
Recent research by Celent took a look at branch strategies across North America, slicing the results into both bank and credit union trends and trends by asset size. Researcher Bob Meara concludes that branches are still the No. 1 channel priority for banks, despite the growing popularity with consumers of self-service models. Indeed, Internet banking ranked a distant second when it came to channel priority, Celent found. And here's where the disconnect comes in. Meara writes, "Celent finds the current branch banking model unsustainable and finds that most banks underestimate the changes that will have to be made to remain viable over the next five years."
The model may be unsustainable because of the high associated costs and continually falling foot traffic-the average branch had 20 percent less foot traffic in 2009 when compared with 2000. At the same time, just slightly more than 10 percent of banks told Celent they are "planning a solution" related to self-service terminals. As Meara notes, "banks appear steadfast in the attitude that when customers visit a branch they will be greeted by staff, not self service opportunities."
If Celent is right and the branch model is unsustainable, there may at least be some consolation in the fact that, gauged by spending plans, almost the entire industry is choosing to ignore that fact.