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Brick and mortar not obsolete, just different

New customer base eschews the velvet-rope lobby setup

Brick and mortar not obsolete, just different

Despite declining foot traffic, the rise of digital banking, and changing generational preferences, the bank branch remains relevant—but only when it’s been transformed into a careful combination where traditional services and interactive financial offerings connect with the bank’s customer base.

“The branch is relevant,” says Joel Abramson, director of business development and strategy for Complete Data Products Inc. “Study after study shows this. It’s the No. 1 sales and engagement channel. Lots of customers like it—older customers, baby boomers, people who still write and deposit checks. It’s still where all the selling takes place.”

He spoke during a recent ABA briefing/webcast titled “The Demise of Branch Banking—Fact or Fiction?”

Still, he says, it is time for a change. He points to a recent Celent survey of monthly branch channel usage which found that 79% of customers used online banking, 69% used an ATM, 68% visited a branch, and 33% used a mobile device. Of those using mobile devices, half were in the Generation Y group, which, he says, in ten years will equal or surpass the influence that the baby boomer generation once wielded in the country’s economy.

Given that it is time for a change, Abramson says, “Is this change a threat or a transformative opportunity? And do you have both the ability to adapt and the motivation to do so? You have to have the right people in place who can take a look at the facts and then make the appropriate changes.”

Briefly, there are three basic steps to take when considering transforming a bank branch, he says:

“First reassess your business model. Look at your strengths and weaknesses, and focus on what’s right.

“Second, understand your customers. Know why they are banking with you. Determine what customers are seeking outside your bank.

“Third, ask what makes your bank unique and what products are highly used. After that, innovate that strength. Make it stronger; make it better.

Getting more specific, the main goals of any branch transformation are to improve branch channel efficiency and effectiveness; control costs; drive revenue; make sure customers have the same experience in the physical store as online; and create new and sustainable experiences for customers who want an in-person interaction.

“Remember that there’s no one-size-fits-all. Take a little bit from here, a little bit from there and see what works. What you’re shooting for is transactional efficiency and effective sales and service,” Abramson says.

Part of all this is the consideration of the newer technologies that can make branches consumer friendly. These could include video tellers, cross-selling technology on hand-held devices, digital signatures, email receipts, text receipts, and much more.

“Just remember this: Never deploy just for technology’s sake, but to benefit and give value to the customer. It’s not about being cool. It’s about being relevant,” he says.

Along these lines, keep these four “pillars of consumer-friendly technology” in mind:

  • • Does it enable a new experience for the customer?
  • • Does it make life easier for the customer?
  • • Is it secure?
  • • Is it fun and user friendly?

For more information about the ABA Briefing/Webcast The Demise of Branch Banking—Fact or Fiction? which also features real-life examples from two bankers, go to

John Ginovsky

John Ginovsky is a contributing editor of Banking Exchange and editor of the publication’s Tech Exchange e-newsletter. For more than two decades he’s written about the commercial banking industry, specializing in its technological side and how it relates to the actual business of banking. In addition to his weekly blogs—"Making Sense of It All"—he contributes fresh, original stories to each Tech Exchange issue based on personal interviews or exclusive contributed pieces. He previously was senior editor for Community Banker magazine (which merged into ABA Banking Journal) and for ABA Banking Journal and was managing editor and staff reporter for ABA’s Bankers News. Email him at [email protected]

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