Banks Rethink Branches as Shift to Digital Banking Grows

by Edward O'Brien 0

Fifth Third Bank’s planned closure of three branches in West Michigan, part of a far broader plan to jettison 100 of its more than 1,300 offices in 12 states, illustrates the situation banks face in adapting to the digital age.

Retail and commercial customers these days are doing more transactions electronically, either online or via an app on their smartphones or tablets, forcing banks to take a hard look at and possibly redefine their physical footprint
Some banks, such as PNC Bank, have invested heavily to renovate and redesign offices to accommodate customers still coming into the branches, often for reasons beyond simply cashing a check or making a deposit or withdrawal.
Even in one instance where a bank is expanding its branch network with a new office, the growth of mobile banking technologies will guide its design.

“How we’re going to do things on the inside is an open question yet,” said Art Johnson, CEO of United Bank of Michigan, a Grand Rapids-based company that plans to renovate an existing optometrist office in Jenison for its 12th branch, which will open in 2016.

Even with the consumer switch to digital banking, ongoing Mercator Advisory Group Banking Channels research shows a continuing desire for branch availability by most banking customers, even if most of their transactions occur digitally. This research confirms the importance of branches, particularly as an advice channel. And while digital banking is important – and growing – it’s the combination and coordination of the self-, assisted-, and full-service channels that is opening up new opportunities to expand customer relationships as part of an omnichannel banking strategy.

Overview by Ed O’Brien, Director Banking Channels Advisory Service at Mercator Advisory Group

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