Insights

'Demand remains' for physical bank branches

Demand for physical banking services is likely to rise in 56% of regions, Deloitte has indicated

Monday 13 January 2014

More than half of English and Welsh regions are likely to see a rise in demand for physical bank branches, according to new Deloitte research.

The business advisory firm reported that 56% of locations in the two countries are due to record growing levels of demand for these facilities.

The report follows the publication of separate research from the firm, which suggested that 72% of Britons still make regular use of the financial services offered by high street stores and shopping centres.

Deloitte’s latest study, entitled Bricks and Clicks: Mapping the Future of Branches, found that the remaining 44% of locations are more likely to see stronger demand for telephone and internet banking. Web users over the age of 65 are expected to fuel this demand.

‘Varying appetite’ for branch services

Louise Brett, lead financial services analytics partner at the group, said physical bank branches still have a future.

She said: “They are poised for a renaissance; just not in their current numbers or formats. Demand varies from one micro-market to the next. If banks are going to keep pace with consumers’ needs, careful consideration will need to be given to where, when and how products and services are provided.”

The Bricks and Clicks report reviewed 10,400 branches operated by almost 100 banks and building societies in a bid to assess how things like populations, demographics and local economies can shape banking requirements.

Evolving needs

Looking to the future, Harvey Lewis, the Deloitte Analytics research director, said workers in some bank branches may be required to focus more on personalised services for new customers, rather than more routine over-the-counter transactions.

He continued: “For others, the branch may need to become a simple, convenient gateway so people can self-serve. This isn’t about closing branches; rather it’s about having the right people, products and services in the right place at the right time.”

Mr Lewis concluded: “Only those that build their branch proposition on the most appropriate balance between ‘bricks and clicks’ will be the winners with customers.”

According to Deloitte’s researchers, bank locations can now be placed into seven key micro-markets.

These are retirement areas, ‘booming’ towns and villages, declining rural communities, struggling ‘blue-collar’ areas, ‘super’ conurbations, commuter zones, and young urban centres.

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Copyright Press Association 2014

Related Links:

Bricks and clicks
Based on analysis of over 10,000 branches of nearly 100 retail banks and building societies, Bricks and clicks explores how factors such as population, demographics and the local economy, both current and forecasted, affect customers’ banking needs.

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