The January/February 2018 issue of Forward, the publication of The Financial Managers Society, features an article by Managing Director Jeff Morris entitled “The Branch of 2018.” Jeff shares his vision for branches in the future which includes technology, but he asserts that it is not all about the latest technology. Jeff envisions future branches as personal financial planning offices staffed by personal bankers who are trained to address customer needs. He believes that traditional teller lines will be replaced by ATMs or ITMs (interactive teller machines) which will be well positioned for customer convenience.
According to Jeff, the new branches will depend upon a workforce that is adept at communicating with customers and understanding financial options. He explains that “you will need someone who can deal with something more than how much money they want out of their checking account today.”
With people preferring to use a phone or laptop for their banking, Jeff thinks that the need for teller lines is decreasing. “As transactions move away from brick and mortar branches in favor of the internet, it’s important that community institutions approach the branch network thoughtfully.” He recommends that banks evaluate their branch networks at least every three years as part of their strategic planning.
Branches are not going away, Jeff states, but community banks need to assess and offer services differently which would serve banks well from a financial perspective as bricks and mortar branches are expensive to operate.
His article also looks at lending services and says that lending is expanding through online services. “Millennials are, in particular, attracted to the convenience of online applications, often leading them to favor online upstarts over local options that could potentially save them money. The community bank gets bypassed in a Google search, and the only way you’ll find it is if you know somebody,” Jeff says.
In his article, Jeff cites the 2017 FMS Research Study “Community Mindset: Bank and Credit Union Leadership Viewpoints” where 47% of respondents noted that adding branches was an important factor for growth; or 53% of respondents don’t think that branches are important for growth.
In conclusion, he states that ” ‘branches of the future’ simply means many institutions will find that they’re able to grow without opening as many branches, and will instead focus on ensuring that the branches that remain are as vibrant, active and profitable as possible.”
Click the link below to see the article as published in the January/February 2018 edition of Forward.
The Branch of 2018 - FMS Article