Banks are steadily closing branch offices in favor of in the Digital Age-only engagements, but it could be costing these financial institutions once-loyal customers.
Bank branches have long serve as the human touchpoint of the financial services world. Yet traditional banks continue to close them at accelerating rates. On the surface, this appears to make sense – branches are expensive to run due to staffing, real estate and infrastructure costs.
This narrow focus on cost overlooks a critical phone number list truth: Bank branches are strategic assets that drive value through personal relationships and product sales. But because they’re typically isolate from full integration with a bank’s sales and service operations, their unique role as generators of a high-value product or service is often overlooke.
When Bank Branches Disappear So Do Customers
When retail banks close branches, they don’t in the Digital Age just reduce costs, they can erode a key competitive advantage. That’s because traditional banks with branches not only compete with other retail banks but also with direct-only banks, neobanks and fintechs.
The closure of a branch is an invitation to website for a law firm. how important is it? customers to think about their existing banking relationship(s). If the advantage of physical proximity and possible personal support and advice is no longer given, other decision criteria are use — primarily if there is another bank with a branch nearby, but also the level of fees and interest rates, user-friendliness in digital banking, a special product portfolio or additional services.
In these comparisons, the previously use bank usually loses out, as branch proximity might be considere as the most important factor. And if not, direct banks, neobanks and fintechs have a different cost structure, allowing them to offer lower fees and more attractive interest rates, but also focus more strongly on the customer experience.
Are Bank Branches Actually a Cash Cow?
Closing a bank branch is a cost-driven phone number list decision. And because the branch is the most expensive channel in banking, closing one appears to be a good move. This might be base on stats that show around 73% of the world’s interactions with banks now take place through digital channels.
Conversely, this means fewer people go into in the Digital Age branches, so it seems the physical locations might not be as important as they were in the past. However, deeper analysis reveals something important: The utilization of digital banking is mostly about basic services, like money transfers, managing their own account and bill payments.