Death of Branch-Banking Model: Could This Be A Reality Soon?

Several Founders, Co-Founders, CXO Bankers, CXO Fintech professionals & people who participated in the ePanel discussions:

  • Mr. Babu Thomas, Vice President, and Head IT Department, The Federal Bank Ltd
  • Mr. Vinod Shah, CIO/GM, Scheduled Apex Bank
  • Mr. Sheoji Meena, Former Director, Bank of India Uganda Limited
  • Mr. Narayanan S, General Manager Business Solutions, Associate Director, Principal Consultant, Cognizant
  • Mr. Jayaram M, Consultant (Partner), Basil Capital
  • Mr. Hitesh Thakkar, Fintech Consultant, Self-Service Automation
  • Mr. Rajesh S. Kher, Head- Digital Marketing, DigiMark Global
  • Mr. Rakesh Shetty, Product Head Micro Loans, Fortune Credit Capital Ltd
  • Mr. Vikas R Panditrao, Co-Founder, Forum of Industry and Academic Knowledge Sharing (FIAKS)
  • Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum requested to remain anonymous

The world is going online in almost all sectors, digitization is picking up its pace. The banking industry is also majorly turning digital, so all this while, Global banking executives don’t see a future for the branch-based model. Sixty-five percent of worldwide banking executives expect that the branch-based model will be “dead” within the next five years, according to survey data collected by The Economist Intelligence Unit (EIU) on behalf of Temenos. [1]

  • Well, this has been heard for many years. To a member, this seems to be country/region-specific. Most of them just cover the metros. These surveys often come up with these insights which often don’t materialize as projected. 60% branch banking is not its death!
  • There has been a drop in branch banking channels but not to the level these surveys have predicted. The set-up of branches may, however, change from a large office to a couple of desks in a mall as an example.

Well, “Online” seems to be the future for some:

  • Brick & mortar banks are already realizing that online is the future but they don’t accept it as they don’t know what to do with hundreds of big branches and staff in it. Well, what can be done is consolidate real estate of branches and staff. SBI did it twice in the last ten years. In addition, they also present an argument that our customers keep asking where is your branch?
  • Member places his point through a quirky example, he suggests that the CEO of the bank should be asking branch banking heads to be seated next to the security guard and watch CCTV cameras in the branches, and send a report on how many millennials visited branches. The answer to the future in digital banking rest in that response!
  • Simple was one of the first digital-only banks which went acquired by BBVA is a classic example that physical bank goes the digital way. Isn’t BBVA acquisition of ATOM in the UK shows that digital-only bank has a future? They had chartered vision ten years back that they will go towards digital despite being one of the oldest banks. Atom Bank has no branches or vast call centers. Customers are enabled to talk to a 30-strong service team via an app.
  • Consolidation is expected and so is the M&A, recent news is VISA acquiring Tink – a Swedish open banking venture for 2.1 billion when they faced regulating issue for Plaid.

Can we call “Phygital” the future?

  • Branch may vanish but physical presence will not go away. Amazon starting Amazon GO store, Lenskart opened up outlets as well, new pharma startups like Zento, Generico has Phygital model
  • Just to take the example of Atom bank, it has a back office. They may not have branches but they still have a lot of human interaction. Plus the UK has an aging population, how many customers will be ready to buy a mortgage without human interaction? In the UK advising a mortgage is mandatory which is done by brokers. So that is akin to outsourcing. Register and Read the complete discussions 

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2021-11-28T18:03:57+05:30November 28th, 2021|Categories: FIAKS bespoke|Tags: |Comments Off on Death of Branch-Banking Model: Could This Be A Reality Soon?
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