Over the last few years, the number of bank branches open across the country has been dwindling, though not all that significantly. Industry experts say that this is often a consequence of the ways in which consumers prefer to bank changing considerably as mobile technology evolves, but it should be noted that while branches are becoming a bit rarer, there are still some things that make them irreplaceable.
Data from the Federal Deposit Insurance Corp. shows that, between June 2014 and the same month this year, the number of branches across the country slipped 1.5 percent, according to a report from the consumer finance site Bankrate. That brought the total amount of branch losses since 2009 to 6.3 percent. But for most major banks, that usually means a loss of somewhere between 100 and 300 locations over the course of a few years, so the difference likely won’t be all that noticeable to most customers.
What does all this mean?
For most people, the way they bank is changing a lot more quickly than the places at which they do so, and the technological advances of the last few years are mostly making it so that financial institutions – both large and small – can grease the skids on the average transaction time, the report said. That is to say, more is being done to smooth the transition from online or mobile banking to the in-person experience, so that people are spending less time in line and talking to tellers, pushing through a larger number of satisfied customers each day despite the potentially shrinking number of branches in their areas.
This may be especially important as the trend of reduced branches continues in the future, the report said. In another five or 10 years, it seems quite likely that the drop-offs in branch locations will have only picked up steam as more options become available via other technologies. However, by then the vast majority of people who currently prefer to bank in person – rather than doing so online or via a mobile device – is likely to have either dropped off simply because they’ve adopted the new technology, or have been further marginalized by a new generation of bank customers. In either event, while there will be no replacing some in-person banking needs, much will likely have been done to improve the transition from new technology into the branch experience.
Recognizing what’s next
Again, this is obviously part of an overarching trend, but it’s something that financial institutions are going to need to carefully consider in the very near future. This may be accomplished through a simple examination of how banking habits have evolved among a certain financial institutions customers in particular, and potentially by breaking down this data on a demographic basis. For instance, if they find that they’re getting more customers who prefer mobile banking but still understand the value of in-person options, it might be worth considering what they prefer about these evolving choices and what can be done to better accommodate those wants even while maintaining most of the features that other consumers want from their branch experience.
While there’s no one way to make every bank customer group perfectly happy at once, the more that can be done to incorporate emerging banking technologies into current offerings so that things are as convenient as possible for all involved, the better off both customers and financial institutions will be as time goes on. The fact of the matter is that the ways in which mobile banking technologies will evolve are likely to be more complex and diffuse than those for online banking more than a decade ago, and institutions that can at least experiment with the various options that will become available in the near future.
While there may be a lot of “doom and gloom” predictions about the future of bank branches, the likelihood that they go away en masse at any point in the even somewhat near future remains remote. As such, branches need to be ready, willing, and able to adapt to the evolving marketplace overall.