Branch density is the goal. Space to build is the challenge. What makes a financial institution’s branching strategy successful? Many experts point to density “more locations and brand”. Agreed! However, what if the target community doesn’t have any suitably sized site options within the desired market? Or, what if there is not a lease space available in this market?
Are more branches an opportunity? Or a risk?
This begs a follow-up question: What about branch network density? Should a financial institution continue to invest in branch density given the advent of new technologies that may lead to a decreasing need for branches? On the other hand, what if these new technologies such as digital channels, interactive teller machines (ITMs), and smart ATMs don’t decrease the number of branches, but rather enhance the capability of the branch to better serve consumers? Is it possible the micro branch can be a solution for these facility questions?
What is a micro branch?continue reading »