Physical branches might not be a lost cause for banks

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story was delivered to Business Insider Intelligence Banking subscribers
earlier this morning.To get this story plus others to your inbox each
day, hours before they're published on Business Insider, click here.In
Business Insider Intelligence's recent Digital Banking Ecosystem report,
we showed that physical bank branches are on the decline, in contrast
to the rising popularity of digital channels like online and mobile: In
the UK, one-third (3,300) of all bank branches closed in the past five
years as of September 2019, while in the US there was a net decrease of
9% of branches nationwide in the past decade.To get more news about [url=https://www.wikifx.com/]WikiFX[/url], you can visit wikifx official website.

We project branch usage by US consumers will drop at a compound annual
growth rate (CAGR) of -2.01% from 2019 to 2024, based on FDIC and
Javelin data.Banks are slashing their branch networks to reduce costs
and stay relevant — but they should proceed with caution. Factors behind
the falling number of branches include shifting consumer preferences
for digital banking (especially as younger generations come to the
fore), as well as many incumbents' desire to cut operating costs by
reducing their physical infrastructure and in-branch headcount as
automated banking options proliferate.However, it's worth noting that
for many incumbent banks, branches remain an invaluable source of
revenue. At Chase, for instance, the vast majority (80%) of its customer
transactions are completed through self-service channels, but a massive
70% of its deposit growth between 2014 and 2018 came from households
that frequent branches.Banks can have their cake and eat it too, if they
adapt their branches for the digital age. Some leading financial
institutions are actually expanding their branch networks, indicating
that they still see value in this channel. For the investment to pay
off, banks should introduce digital elements to their branches.For
example, they could leverage third-party solutions, such as Fiserv's
Interactive Branch Kiosk, which is designed to make it easier for
consumers to handle transactions within branch lobbies, drive-thrus, or
other locations without a teller.They could also introduce mobile and
IoT devices at branches, an approach Nationwide tested in its upgraded
branch concept by adding a video calling service and iPads to access
account information. Such upgrades can help banks reduce operating
costs; retain loyalty among customers who prefer branches but want the
same conveniences offered to digital-first customers; and make the
important branch revenue stream work for them in an increasingly digital
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read the briefing here.