# The Future Role of Bank Branches Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2020-05-15 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: The Future of Bank Branches in Post-COVID Era Meta Description: Discover the impact of COVID-19 on bank branches and how banks can adapt to meet evolving consumer needs while maintaining brand loyalty and economic growth. URL: https://financedigest.com/the-future-role-of-bank-brancheshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/appetite-1736838918200-compressed.jpg) _By **Sudeepto Mukherjee**, Senior Vice President, Financial Services Lead EMEA & APAC Publicis Sapient_ Even before the COVID-19 crisis, the rising popularity of mobile banking coupled with the strained finances of banks, was putting the viability of bank branches in question. Between 2012 and 2019, the total number of bank and building society branches in the UK had fallen by ~22%. However, in spite of this [shift branches have continued to play an important role for both consumers](https://www.financedigest.com/demand-for-automotive-radiator-market-driven-by-shifting-consumer-perceptions-and-growing-awareness.html "Demand for Automotive Radiator Market Driven by Shifting Consumer Perceptions and Growing Awareness") and banks themselves. Research has shown that a majority of consumers still prefer branches for more complex financial [needs](https://www.financedigest.com/embedded-finance-is-the-new-norm-in-banking-but-what-is-needed-to-unleash-its-full-potential.html "Embedded finance is the new ‘norm’ in banking, but what is needed to unleash its full potential? "). Research from data specialists CACI has found that surprisingly, the decline of branch visitors has been modest, equating to just 1-1.5% per year, with digital channels supplementing the [customer experience](https://www.financedigest.com/getting-customer-experience-right-in-financial-services.html "Getting customer experience right in financial services") rather than replacing it. For banks, branches play an equally important role in brand engagement, ability to [offer differentiated services](https://www.financedigest.com/barclays-sets-up-taiwan-subsidiary-to-offer-brokerage-services.html "Barclays sets up Taiwan subsidiary, to offer brokerage services") (e.g. premier offerings) and providing essential everyday [banking needs](https://www.financedigest.com/what-banks-need-to-prepare-for-eba-pillar3-disclosure-of-esg-risks.html "What Banks Need to Prepare for EBA Pillar3 Disclosure of ESG Risks") for consumers and institutions – all of which are vital for creating loyalty and acquiring new customers. A [recent study](https://www.financedigest.com/silicon-capacitors-market-to-garner-us-3100-million-by-2027-at-8-cagr-recent-study-by-tmr.html "Silicon Capacitors Market to Garner US$ 3,100 million by 2027 at 8% CAGR – Recent study by TMR") by Move Your Money showed that branch closures dampen SME lending growth by 63% on average in postcodes that lose a bank branch demonstrating the importance of branches in meeting economic needs. So, what will the [impact of COVID-19](https://www.financedigest.com/predisposition-biomarkers-market-future-trends-segmentation-strategies-to-boost-growth-applications-with-covid-19-impact-till-2028.html "Predisposition Biomarkers Market Future Trends, Segmentation, Strategies to Boost Growth, Applications with Covid-19 Impact till 2028") be on the role of branches? Can [banks redefine the operating model of branches without jeopardising their reputation with customers or damaging the overall economic recovery that is so desperately needed](https://www.financedigest.com/traditional-banks-need-an-overhaul.html "Traditional banks need an overhaul")? The pandemic has accelerated [digital adoption](https://www.financedigest.com/why-banks-cant-adopt-digital-identities-fast-enough.html "Why Banks Can’t Adopt Digital Identities Fast Enough"), condensing two years’ worth of digital transformation into a couple of months. Forced to transact [digitally for a majority of their everyday needs](https://www.financedigest.com/people-need-people-humanising-the-digital-banking-experience.html "People need People – Humanising the digital banking experience"), more and more consumers/institutions will now be open to embracing a new model where branches are no longer the primary place for servicing their needs. Given the high cost of maintaining a physical network of branches, this creates a [unique opportunity](https://www.financedigest.com/manufactured-homes-unique-opportunity-to-aid-the-housing-crisis.html "Manufactured Homes’ Unique Opportunity to Aid the Housing Crisis  ") for Banks to leverage this shift in consumer preference to reduce branch numbers further and create a new service model. So what role should branches [play in this new model and how can banks](https://www.financedigest.com/dont-play-second-fiddle-how-disruptor-banks-can-leverage-music-and-audio.html "Don’t Play Second Fiddle: How Disruptor Banks Can Leverage Music and Audio") make this important transition? **Customer First Approach** Banks need to take a customer [centric](https://www.financedigest.com/transforming-to-customer-centric-service-in-financial-services.html "Transforming to customer centric service in Financial Services") lens to consider how a reduced branch network can still meet the needs of their customers and shareholders while increasing efficiency. Branches can still be a powerful channel for creating brand engagement and [driving sales](https://www.financedigest.com/demand-for-mabs-is-exepcted-to-drive-sales-growth-of-pemphigus-vulgaris-treatment-market.html "Demand For Mabs Is Exepcted To Drive Sales Growth Of Pemphigus Vulgaris Treatment Market"). However, the role of branches should shift to focus on fewer high [value services](https://www.financedigest.com/becoming-more-than-a-bank-adding-value-through-financial-solutions-as-a-service.html "Becoming more than a bank: adding value through financial solutions as-a-service") like giving complex advice or helping acquire new customers by demonstrating key products/differentiators. Other cash transactions should be automated as much as possible with [next gen ATMs or moved to digital](https://www.financedigest.com/quantum-computing-in-finance-the-next-digital-arms-race.html "Quantum Computing in Finance: The Next Digital Arms Race?") channels. We’ve seen examples of this in other sectors like Apple who have used a small number of their flagship retail stores to amplify brand and increase [customer loyalty](https://www.financedigest.com/the-problem-with-measuring-customer-loyalty-and-how-to-overcome-it.html "The problem with measuring customer loyalty; and how to overcome it"). However, this needs to be complemented by other strategies to ensure that [consumer expectations and service](https://www.financedigest.com/keeping-up-with-heightened-consumer-expectations-in-financial-services.html "Keeping up with heightened consumer expectations in financial services") standards are maintained. These should include: - **Revamping call centres and [creating innovative](https://www.financedigest.com/probiotic-soda-market-product-innovation-by-live-soda-and-lifeway-foods-to-create-exciting-growth-opportunities-reports-by-fact-mr.html "Probiotic Soda Market: Product Innovation by LIVE Soda and Lifeway Foods to Create Exciting Growth Opportunities, reports by Fact.MR") ways to provide services outside branches:** Call centres need to be scaled up to provide more personal and complex services. This requires upskilling of staff and using the [latest technologies](https://www.financedigest.com/cardiac-valvulotome-market-growth-latest-trends-top-players-competition-technological-advancements-outlook-and-forecast-2028.html "Cardiac Valvulotome Market Growth, Latest Trends, Top Players, Competition, Technological Advancements, Outlook and Forecast 2028") to ensure that the right data/tools are used to meet user queries quickly. Banks also need to look at innovative ways to provide services like [opening more self service centres where video conferencing or interactive teller machines can assist customers without human contact and introducing secure delivery services to enable](https://www.financedigest.com/the-open-banking-revolution-enabling-accessible-and-inclusive-finance.html "The open banking revolution – enabling accessible and inclusive finance") the elderly and more vulnerable to do banking at home. - **Creating a strong digital infrastructure to enable an omni-channel service:** Banks need to provide more and more services (like account opening, loan/mortgage applications) online and ensure that there is a consistent [customer experience](https://www.financedigest.com/improving-customer-experience-and-profits-with-embedded-payments.html "Improving customer experience and profits with embedded payments") across channels. This will make customers more comfortable using a broader ecosystem rather than their local branch. - **Bringing customers along on this journey**: All this will work only if there is also a strong focus on educating customers on how to use alternative channels and ensuring that they can access relevant [services securely](https://www.financedigest.com/facilitating-open-finance-through-secure-services.html "Facilitating open finance through secure services") and with ease. Making this transition will not be easy. Constrained finances and a higher compliance burden, have resulted in a large [technology debt and complex operating models in most banks](https://www.financedigest.com/banking-from-anywhere-embracing-technology-to-exceed-customer-expectations.html "Banking from anywhere: embracing technology to exceed customer expectations"). [Banks have to take a more ambitious approach to “jump” to this new model](https://www.financedigest.com/apis-open-banking-and-new-business-models.html "APIs, Open Banking and New Business Models"). [Digital leaders like Amazon and Netflix have shown how a shift from physical stores to a more digital centric ecosystem can not only be more efficient but also create value](https://www.financedigest.com/how-to-create-value-in-digital-transformations.html "How to create value in digital transformations") for consumers. Now is the [time for banks](https://www.financedigest.com/now-is-the-time-for-banks-to-introduce-intelligent-account-analysis.html "Now Is the Time for Banks to Introduce Intelligent Account Analysis") to seize this opportunity to redefine the role of branches and create a new service model that is future-proof, allowing it to thrive in the new normal that we all find ourselves living in. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---