Bank Branches: Back to the Future, or a Brave New World?

CIO, CMO, CSO, Strategy and Advisory, Financial Services
March 6, 2014

For most of the last 20 years, the banking industry (banks and credit unions) has been building new branches furiously, while during much of the same timeframe, experts have been using terms such as over-branched, branch market saturation, and obsolete to predict the demise of bank branches. We could add the emerging channel of mobile banking (smart phone and tablets); more capable ATMs; and increased competition from non-banks like Ally Bank, Capital One 360 (formerly ING), Discover Bank, and USAA Bank, as all put pressure onto the bank branch as we know it. While circa-1996 predictions of branch closings wouldn’t seem out of place in today’s industry headlines, bank branches continue to be key to most bank strategies.

So, why do banks continue to expand branch networks, when for years, the collective opinion seems to suggest that branches are going the way of the dinosaurs?

The annoying truth is that regardless of how often branches are discounted, customers just are not cooperating.

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