Think through some of the changes you have experienced in product/service delivery of banking services: extended hours, proliferation of branches, consumer loans, certificates of deposit, credit cards, debit cards, ATMs, drive- in banking, multiple mortgage products, etc. These changes have all occurred in the last 35-40 years - and the changes are just starting.
Ranging from remote deposit using a smart phone, to ATMs that can manage virtually all types of transactions with no human teller intervention, technological tools are replacing physical branches and customer-to-teller interaction.
In a recent announcement PNC Financial disclosed they were closing 200 branches this year (out of a total of 2,900). The stated reason is to prepare for the “digitally thin” customer environment. That “digitally thin” designation refers to both cost-cutting and customer behavior/preference. PNC estimates that a standard transaction with a teller in a branch costs about $3.88 each. Digital and electronic transaction costs range from 10¢ to $1.00 each, depending on the type. So there is a significant cost element. But…consumer preference is the real driving force. Today’s consumers can use their computer, their smart phone, a remote deposit device, and on-line applications for loans or deposits in order to execute a transaction, anywhere, anytime. Why go to the branch?
Well, I think you will see the designs of the branches that do remain reflect a different look and purpose. No longer will the teller line/windows be the main feature of the branch. More likely you will see an increasing use of “smart” ATMs with fewer human tellers, while the branch will become the place to open accounts and discuss how to best match the consumer’s needs with products/services that the bank offers. This will be the real value-add in the not-too-distant future. Many will never visit a branch again.
Online products and services combined with hardware—smart phones and computers—and an application to do anything make banking more convenient for you.
As the environment has changed in the past, it will continue and you benefit with greater flexibility and lower costs. Maybe change is not so bad