As America keeps attempting to reopen, a key question among traditional financial institutions continues to be whether the branch has a future. New research from Simon-Kucher & Partners indicates that branches do have a strong outlook, but that institutions won’t have to maintain as many of them to provide the key services that the public as a whole wants from them. That prediction, however, comes with a big “if.”
The research, conducted in June 2020, confirms that as COVID-19 pushed branch-using consumers toward digital channels, many of them found they liked mobile and online banking, and will do more that way going forward. However, when asked for their preferences for more complex banking transactions, such as obtaining a mortgage, many still preferred an in-person interaction in a branch to a digital transaction.
And when they do want personal interaction, consumers would be willing to walk further to visit a branch, in urban areas, and would be willing to drive further in suburban and rural areas.
The implication is that some of the infilling of branches in many markets done over the years can be reversed. The chance to reduce facility, staffing and other branch costs in this way is attractive, especially with the industry facing a recession economy.
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