# Are white-label branches the future for retail banking? Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-01-28 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: Why Physical Branches Are Still Vital for Banks in a Digital Age Meta Description: Discover why physical branches are essential for providing support to customers, especially in times of crisis, and how they contribute to financial security URL: https://financedigest.com/are-white-label-branches-the-future-for-retail-bankinghtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/untitled-design-34-1736838615149-compressed.jpg) _By **Brian Holden,** Global Director at_ [_SAS UK & Ireland_](https://www.sas.com/en_gb/home.html) Throughout the pandemic, stories of branch closures have been commonplace as the pivot to digital pushed consumers towards online banking. Such decisions will not have been taken lightly, with questions raised around what is truly needed for [banks](https://www.financedigest.com/emerging-global-trends-in-digital-finance-and-banking-innovation.html) to continue serving their network of customers. One could be forgiven for the assumption that banks wouldn’t need physical branches in the future given all the hype around digital banking over the past couple of years. But the pandemic has turned this argument on its head – [customers don’t](https://www.financedigest.com/you-dont-need-magic-to-anticipate-your-customers-needs-just-the-right-tech.html "You don’t need magic to anticipate your customers’ needs, just the right tech") want to speak with digital assistants during times of financial uncertainty, they want to speak with real people who can support them through the crisis. This would explain why many nano and challenger banks may be struggling right now, with consumers transferring [funds back](https://www.financedigest.com/norway-sovereign-fund-backs-teck-resources-in-battle-with-glencore.html "Norway sovereign fund backs Teck Resources in battle with Glencore") to long-held current accounts with established banks. Under current circumstances, people are putting their trust in [banks with track records of supporting customers](https://www.financedigest.com/insight-into-tomorrows-retail-banking-customers.html "INSIGHT INTO TOMORROW’S RETAIL BANKING CUSTOMERS") in times of difficulty, where they have access to human assistants to help them with their problems. **Supporting every customer** It’s become increasingly clear that online banking just isn’t accessible for large segments of the community. Older people, for example, often aren’t comfortable with the online world. They may not know how to use a computer or smartphone. They’ve heard horror stories about falling victim to fraudsters. And many feel it’s not worth the [risk to engage with online banking](https://www.financedigest.com/the-risks-and-rewards-of-ai-in-banking-in-2022.html "The risks and rewards of AI in banking in 2022") at all. There’s also a worry that when [banks](https://www.financedigest.com/emerging-global-trends-in-digital-finance-and-banking-innovation.html) close branches and move out of a local community, people may be more likely to seek other sources of credit – often at much higher interest rates than high-street banks would charge. This could have a damaging impact on their financial security, particularly in the COVID era, when many people who have suffered [job losses](https://www.financedigest.com/irish-consumer-sentiment-dips-slightly-on-tech-job-losses.html "Irish consumer sentiment dips slightly on tech job losses") or reductions in income will find themselves struggling to service their existing debts. If everyone has access to a local branch on their high street, many of these problems evaporate. That’s the real social benefit of [banks](https://www.financedigest.com/emerging-global-trends-in-digital-finance-and-banking-innovation.html) having a physical presence in the community. As banks increasingly focus on their social responsibilities in helping the country recover from the COVID crisis, [local branches will play a key role in supporting](https://www.financedigest.com/xledgers-long-term-local-support-for-bristol-sport-a-successful-partnership.html "Xledger’s long-term local support for Bristol Sport – a successful partnership") not only the affluent but those who have fallen on hard times too. **Different** [banks offering the same service](https://www.financedigest.com/any-business-can-now-offer-their-customers-financial-services-how-embedded-finance-is-reinventing-the-wheel-when-it-comes-to-banking.html "Any business can now offer their customers financial services: How embedded finance is reinventing the wheel when it comes to banking") However, although we’ve established that branches are a social good, that doesn’t [necessarily mean](https://www.financedigest.com/spiralling-azure-costs-dont-necessarily-mean-your-cloud-strategy-is-off-course.html "Spiralling Azure costs don’t necessarily mean your cloud strategy is off course") that every bank has to have a branch on every high street. The vast majority of the activity that takes place in branches is simple and transactional. [Customers check their balance](https://www.financedigest.com/theres-a-fine-line-between-relinquishing-control-and-accountability-financial-institutions-must-balance-both-to-successfully-cloudify-operations-and-meet-customer-expectations.html "There’s a fine line between relinquishing control and accountability. Financial institutions must balance both to successfully cloudify operations and meet customer expectations"), make withdrawals, pay in cash and cheques, make payments, and so on. All of these tasks are generic [enough that the process doesn’t vary much between banks](https://www.financedigest.com/why-banks-cant-adopt-digital-identities-fast-enough.html "Why Banks Can’t Adopt Digital Identities Fast Enough"). You don’t get a noticeably different or better experience when you withdraw [cash from one bank’s](https://www.financedigest.com/european-banks-cash-in-on-rising-rates-as-clouds-gather.html "European banks cash in on rising rates as clouds gather") branch than you would at another bank’s branch, for example. Some of the in-branch processes are slightly more complex – establishing proof of identity when opening a new [bank account](https://www.financedigest.com/community-fintech-11onze-to-launch-el-canut-a-super-app-offering-universal-banking-accounts-and-digital-debit-cards.html "Community fintech 11Onze to launch – EL CANUT – a super APP offering universal banking accounts and digital debit cards"), for example. But even then, it’s a process that all [banks need](https://www.financedigest.com/scams-have-eroded-digital-trust-banks-need-to-do-more-to-combat-the-industrial-scale-of-scams-in-the-uk.html "Scams have eroded Digital Trust – Banks need to do more to combat the industrial scale of scams in the UK.") to implement at their branches. And there’s no real differentiation between banks because they all [need to comply with the same Know Your Customer](https://www.financedigest.com/3-reasons-your-business-needs-customer-reviews.html "3 reasons your business needs customer reviews") regulations. Finally, there are higher-level services, such as face-to-face [meetings with financial advisors to discuss](https://www.financedigest.com/new-zealand-pm-meets-biden-to-discuss-u-s-indo-pacific-strategy.html "New Zealand PM meets Biden to discuss U.S. Indo-Pacific strategy") pensions, mortgages or investments. These are an important [differentiator for banks](https://www.financedigest.com/ant-group-starts-to-differentiate-consumer-loan-business-jiebei-from-bank-loans.html "Ant Group starts to differentiate consumer loan business Jiebei from bank loans"). But since they effectively only require a meeting room, a desk, a computer with a secure internet connection, and a couple of chairs, there’s no reason why, for example, a [Banking Relationship Manager necessarily needs to meet their clients at their own brand’s](https://www.financedigest.com/banks-need-to-become-a-lifestyle-brand.html "Banks need to become a lifestyle brand") branch. **White-label banking** What am I proposing, then? Well, instead of each [bank paying](https://www.financedigest.com/why-pay-by-bank-app-will-come-into-its-own-in-2022.html "Why Pay by Bank App will come into its own in 2022 ") rent, rates, bills and salaries for different buildings on the same high street, branch banking could take inspiration from co-working spaces. We could have a “white label” concept, where a single high-street location acts as a shared service centre for all banking-related activity, regardless of which bank(s) the [customer holds](https://www.financedigest.com/why-poor-customer-communication-is-holding-open-banking-back.html "Why poor customer communication is holding open banking back") an account with. This would not only significantly reduce overheads for the entire retail banking [industry](https://www.financedigest.com/the-survival-of-the-banking-industry.html "THE SURVIVAL OF THE BANKING INDUSTRY") but also reduce carbon footprints and contribute to banks’ sustainability goals. A single location could house all the apparatus required by a [traditional bank](https://www.financedigest.com/digital-banking-traditional-banks-vs-fintech-providers.html "Digital banking: Traditional banks vs. fintech providers") branch: a secure vault with safe deposit boxes, ATMs, a row of cashiers’ windows and so on. Staff could be trained to handle all of the day-to-day transactional business of paying in, withdrawals and even KYC checks in a standardised way and pass the [information securely](https://www.financedigest.com/the-importance-of-information-security-in-a-post-pandemic-hybrid-working-world.html "The importance of information security in a post-pandemic hybrid working world") to each bank’s back-end systems. Then, for the higher-level services, financial advisors from any [bank could simply reserve a meeting room in the building](https://www.financedigest.com/building-the-bank-of-you.html "Building the Bank of You") and arrange to meet their clients there. Even today, many advisors (especially mortgage specialists) are itinerant, splitting their time between several different branches in different towns instead of having a single permanent [office](https://www.financedigest.com/cavai-tests-innovative-new-approach-for-the-home-offices-parentwise-pilot-campaign-helping-parents-and-carers-in-the-west-midlands.html "Cavai tests innovative new approach for the Home Office’s ‘ParentWise’ pilot campaign helping parents and carers in the West Midlands") at a “home branch.” The white label concept would simply take things one step further, with advisors from different banks co-working flexibly in whichever branch is most convenient for the customer. **Putting white-label branches into practice** The Post Office is one facility present on almost every high street which offers everyday banking services – could we [see a return to the days where they were used for the majority of banking](https://www.financedigest.com/europes-banks-brace-for-russia-fallout-while-u-s-banks-see-limited-pain.html "Europe’s banks brace for Russia fallout while U.S. banks see limited pain") transactions? While it is certainly possible, the [Post Office is already preoccupied with an extensive range of other services](https://www.financedigest.com/why-do-you-need-to-buy-guest-post-services.html "Why Do You Need to Buy Guest Post Services?") and is under considerable strain as a result of pandemic-related staff shortages. What’s more, white-label branches will need systems, processes and regulatory oversight geared specifically for the [banking industry if they are to be truly effective](https://www.financedigest.com/how-effective-talent-management-could-disrupt-the-retail-banking-sector.html "HOW EFFECTIVE TALENT MANAGEMENT COULD DISRUPT THE RETAIL BANKING SECTOR"). All of this means the best bet would be to convert former local branches to do the job, or to build a completely new facility. While this may seem far-fetched, the reality is tech-savvy consumers are already making use of white-label branches. With the touch of a button, smartphones are [enabling customers to access](https://www.financedigest.com/the-open-banking-revolution-enabling-accessible-and-inclusive-finance.html "The open banking revolution – enabling accessible and inclusive finance") any of their current accounts by simply downloading an app – so why should this be any different on the high street? --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---