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Why the branch vs branchless debate is futile

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I’ve been struck by many nuances of culture and creed lately.

There are many examples, but it all comes down to dealing with the customer as a unique entity, not some mass market.

For example, why does Spain have so many bank branches?

Spain has around 43,000 bank branches, about half as many as the whole of America.  America is a country with almost seven times as many people and a land mass twenty times larger than Spain’s.

And why do Russian’s buy online but pay in cash?

You might as well ask why are the British British or the Dutch Dutch, as it’s all to do with our generational DNA.

You cannot reprogram a generation overnight, even if Apple has done a good job of trying to achieve this.

That is why any bank looking to innovate must carefully consider the cultural acceptability of their innovations within a country – the French rebelled massively against offshore call centres and Germany, even with the crisis, still has a great trust in their banks and their direct, rather than remote, operations.

This is why some countries in Asia have massively innovated in mobile – the Japanese have no space in their homes for PCs, pets or luggage, which is why they love mobile, chihuahuas and rent their suitcases  – whilst others have not  – Americans can have computer rooms, Great Danes and Winnebagoes by the truck load.

This is why we can talk about getting rid of branches, but that only works where customers want to lose their branch.

In many emerging and developing economies, branches are expanding.  In fact, JPMorgan has been actively expanding its American branch network as this generates new account opening, customer loyalty, cross-sell opportunities and generally accounts for additional revenues of $1 million per year per branch.

However, as cultures evolve and economies move forward, things do change.

This is why we are seeing the decline of the role of branch in most Northern European economies as remote access, self-service and electronic identities enable account openings and ubiquitous service without the need to ever set foot in a branch.

But what really help the Northern Europeans is the decline of the use of cheques (checks), unlike America where the check is still a strong motivational force for branch traffic.

All of this was debated in depth by my mate Brett King over on the Economist’s website during the past two weeks.

Brett lost the debate, with 64% of the audience saying that bank branches are not obsolete whilst 36% voted that they are (including me).

But this is a debate that will continue and it really does come down to local attitudes and generational change, neither of which will change overnight of even in one generation necessarily … but change it will. 

One day.


Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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