One of the biggest shifts in banking in the past few years has been the decline of the branch. As Anthony Burnett of LEVEL5, a branch consultancy, mentioned, many banks are struggling to make the old branch model work in the modern banking environment. In a time of increasing mobile and online banking, many bankers may be wondering what the future role of the branch is.
While banking has changed a lot in the past few years, the branch can still play an integral role. One driver of the profitable branch in the modern banking environment is taking advantage of technological advances to provide higher value services to the customer in the branch. As discussed in a whitepaper by Abrigo, one key to creating a successful modern branch is to provide a pleasant and comfortable space to do business, along with universal staff at the branch that can assist a customer with their business from start to finish.
However, before a bank can start on its branch transformation journey, it needs to make decisions about which branches to work with, and what changes to make to those branches. These decisions need to be driven by data about the branches and their surrounding demographics.
The first decision many banks have to make when deciding to undergo a branch transformation is which of their branches is the best candidate for transformation. Perhaps a bank wants to attract customers in need of commercial loans. In this case, a bank would want to cultivate a branch in an urban business or retail district. Using branch analysis, the bank can see where certain types of businesses, such as retail, are concentrated in a city and choose to place a new branch or renovate an existing branch in that area.
Recent college grads are another popular target. As these young adults graduate and get jobs, they will need many financial services. Placing a branch in an area where many recent college graduates live will help the branch attract those recent graduates to become new customers.