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“The future of financial services is outside the branch,” writes NetBanker. Is it true, that your bank branch, with its friendly human tellers and occasional coffee and snacks, will be obsolete; can your laptop and smartphone take care of all your banking needs?

Reality Check

In the rise of mobile banking and virtual banks, Netbanker’s statement has truth to it—many of our daily banking needs are shifting to more convenient and accessible technology-enabled services. Driving to a bank and waiting in line for a teller seems like an unnecessary hassle. For example, Chase is introducing a check-deposit feature that allows your phone to take a picture of your check to deposit it anywhere—even in the bathroom, the Chase commercial chimes. Bank of America and Visa are teaming up to release a
smartphone service to pay purchases via smartphone, which is a quicker and easier payment method than finding an ATM or branch. Internet-based banks like Ally, BankSimple, and INGDirect are stealing customers from brick-and-mortar banks with the promise of convenience, better rates, and simpler terms.

Solution?

So maybe branches need a makeover. One interesting suggestion from The Financial Brand is that branch layouts need revamping or else they’ll die off. The problem is that most banks don’t put their “milk in the back of the store”, i.e. put the most-wanted services, like tellers, in the back of the branch so customers must walk through additional products and services before they get what they need. It’s the same reason grocery stores put milk in the back on their store. “Putting the milk in the back of the store” guarantees bank customers are bombarded by sales reps and products, increasing the likelihood they’ll walk out of the branch with more than they bargained for. It’s just like when you walk into a grocery store for one item, but pick up bread, cookies, and soda on your way out. By designing a branch that engages customers, the bank branch can reclaim a relevant role in consumer lives.

Bye Bye Branches

Beyond practical design, Netbanker points out that bank branches still have significant changes to address before they can compete in the fast-moving pace of technology’s marriage to financial services. Despite what a branch can offer, like the comfort and added customer service of human representatives, technology-based banking may be too compelling, too convenient, and too accessible to beat. Think about what happened to the radio after the rise of television. Branches may not become extinct, but they may grow a little quieter and more discreet in the noise of technological advancement.

Bottomline: Do you think you’ll be switching your banking from branches to more online, technology-based methods like online and mobile banking?