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Maintaining those all those legacy systems in the banks does cost a lot, no matter what the geography.  Some say too much!

Removing branches is seen as a good cost saver when you look at the cost per transaction when compared to digital channels, and so is an easy target for the technologists or financial roles to reduce overall operational costs. 

There are still functions that the branch provides that the digital channels can’t. Functions such as a high street advertisement; service location; giving assurances to the customer base that the bank is ‘real’ etc. (more points covered above). There is no doubt that the current branch networks and systems are not fit for purpose (they are transaction-centric and not service-centric; some branches are physically larger than they need to be; there may be more branches than what may be required; they can often fall behind the ease and experience of what is offered online). 

Keep in mind that branches have not had much of those large IT budgets allocated to them as banks (rightly) embraced the digital direct channels to fulfil customer requirements and changing culture and consumer behaviour. 

Revamping the branches to work as part of the overall offering of a bank and to have them part of the complete omni channel offering needs to be done…..if the divide between digital and branch is 70/30 as stated above, there are still 30% of customers that prefer the branch: should they be forced to the digital channels against their wishes?  If so, will they remain in that financial institution?

The question is: “How do you maximise the benefits of the existing branch network that 30% of your customer base prefer (and maybe even some of the 70% use)?”  To reiterate above….the branch and digital channels are not mutually exclusive, there should be a considered “Flicks AND Mortar” approach.