The physical Bank Branch, as we know it, is Dead. Long Live the Remote Branch.


The pandemic has a lot to answer for. Whether you perceive it’s all bad, it’s certainly accelerated trends and jolted business leaders into action.

One of those trends is the accelerated closing of bank branch networks and the re-shaping of the service delivery they provided. Way before lockdown restricted their movement customers were already voting with their feet by using branch services less and acting with their fingers and thumbs more by opting to operate their bank accounts remotely via mobile. Covid has fast tracked the uptake of digital banking and cashless trading. The ‘stay home’ requirement of Covid jolted business leaders into expanding digital alternatives to branch customer services over night.

Branch days are numbered. They have less than 2000 days left according to an Economist Intelligence Unit survey – 65% of industry executives from around the world think that the branch-based model will be dead within five years. Bankers in North America are most bullish on this prediction, with those in Asia Pacific least convinced.

HSBC’s bank branch rationalisation strategy includes conversion of branches to cash only service and digital services. Their strategy supports the concept of the Remote Branch service – where all services currently being provided by a physical branch – account opening, loans, mortgages and advice – become available as a digital service, utilising staff in the branch network to support customers online wherever they may be located.

However it is very clear. In the future, there will be fewer physical banking facilities. Some will serve as hubs for those customers who prefer face to face in-depth interactions or for small business and commercial activities. In the main transactions and traditional interactions will occur outside the branch with convenience being defined by the simplicity and ease of the digital engagement as opposed to how easy it was to get to the branch, determined by its geographic location.

The concept of a Remote Branch can help bank brands stay connected with their customers. As an award-winning provider of savings and mortgages Skipton Building Society is remaining true to their brand promises – delivering banking services with a ‘human touch’ – and looking to offer digital branch services online.

With a network of almost 90 branches reaching from Exeter to Aberdeen, Skipton is now one of the UK’s largest building societies. With a growing customer base, particularly online, Skipton has invested in web chat, social media services and the development of its digital platforms including an app, giving its customers more choice in how they interact with the organisation.

When Covid hit, Skipton reaped the rewards of having invested in video and content sharing capabilities – branded as ‘Skipton Link’ – which enabled them to continue offering mortgage and investment advice as Business As Usual. Skipton is now looking to offer a Remote Branch service, enabling branch services to be provided digitally.

Essential Branch ServicesRemote Branch Services Required to Support:
Account servicingSupport for those not yet using apps and online banking
Account managementOpening, closure, consolidation
SavingsMaturity and rollover support
Life event supportBereavement, separation, redundancy, power of attorney
AdministrationMoving, marriage, name and address changes
FraudTransaction disputes
FeedbackComplaints

A Remote Branch is not limited to digital only, self-service fulfilment services. Many in-branch services just can’t be replaced by simple telephony call centre support. Sales benefit from visual connection and engagement – customers are more likely to purchase additional services over video than over the phone, so it’s not just about replacing a branch with phone only services.

Research by Cynergy Bank concludes that 78% of small and medium-sized enterprises (SMEs) call for digital transformation of banking to be balanced with a human element. The survey of over 1000 senior decision makers at SMEs in the UK, conducted in February this year, revealed that while businesses acknowledge the benefits of the digital banking revolution – with 68% agreeing that it has vastly improved their banking experience and the ease with which they can manage their finances – there is still an overwhelming desire for a blend of digital functionality and human interaction.

Companies were asked to rank their most important services. One of the most desired banking services was 24/7 access to customer service via an app but with human contact. 29% confirmed that human support would be a prerequisite before they would move all business banking to digital only services.

So customer journey support capabilities are required that seamlessly blend digital self-service with human assistance at the point of need.

Human assisted service needs to be retained. Skipton have achieved this by effectively opening up their entire advisor population across all branches to all customers. If a customer would like to speak to a financial advisor, but the one in a local branch isn’t available, they can be connected with another advisor somewhere else in the country. The Remote Branch overcomes the limitations of geography. To find out more about how Skipton increased remote advisory sessions by 600% during the pandemic read the case study.

As the pandemic continues to accelerate the shift to digital services, banks are in danger of reducing the opportunity to build important relationships with their customers. A human digital model built on using the best of both worlds will not only reduce cost and increase customer satisfaction but will also accelerate growth. Learn more from Christian Dalton, Head of Wealth Direct, Santander UK, as he talks to Vizolution about how 50% of all new investment business is now completed using a hybrid of digital and human engagement and customers are delighted with the service which has a NPS 80+.

Australia Bank’s (NAB) investment programme in their branch network appears on the face of it to be bucking the trend. However 93% of NAB’s customer interactions take place via the bank’s app, online, over the phone or through video, so why is it putting $100 million into branch refurbishments this year?

It’s providing more digital services, like self-service digital bars and self-service machines that are available 24 hours a day, but the real reason is so NAB can continue to have in-depth conversations with their customers about how they can help them achieve their goals. So is the physical bank branch – as we know it – really a thing of the past? Yes, but the Remote Branch that supersedes it will need to ensure that the customer experience is not just transactional but even more conversational.

Article Written by Tony Heyworth, Head of Marketing at Vizolution


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