Brett King, best-selling author of BANK 2.0 and BANK 3.0, renowned public speaker and advisor to some of the world’s biggest financial services organizations and leading brands, opined that banks should go digital and rather than keeping their physical bank branches.
“The bank branch started as a distribution point for cash but has morphed into a place for bank products and an advisory space – where the banker knew something you didn’t,” explains Brett King, founder of US-based Movenbank (which has no retail branches) and author of the new book Bank 3.0.
“This shifted in the 1980s when telephone banking allowed consumers to call up and do basic transactions outside of the branch. In 2008 in the UK, internet became the preferred channel for day-to-day banking, surpassing the branch. Since then, the shift in banking behaviour has only sped up.”
This is not to say, however, that the branchless model will dominate the UK retail banking landscape any time soon. “There is a strong belief among some older customers that bricks and mortar provides stability,” says King. “This attitude is thought to linger from the Great Depression – if something goes wrong, people want to know there is somewhere they can go and yell at someone.”
But he adds that the use of bank branches is decreasing fast and that banks need to adapt. “In 1995, the average Briton would visit a branch twice a week, but by 2016 mobile will be the primary way in which people interact with their bank. Branch use will be down to just one or two times per year,” he explains.
This does not mean that banking will become fully automated, though. Human contact is still important – but it does not need to be with a human being sitting behind a counter in a branch, says David Conway, strategy director at Nunwood market research agency, and the founder of internet-based bank Smile (part of the Co-operative)
“More people are doing the basics of banking online or on their mobile,” he says. “But when people go into a branch it is because they feel their problem is too complicated to solve online. The bank of the future should be trying to push knowledge into the digital channels – in the form of online and phone assistants – so that people can get the information they need without going into a branch.”