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To branch or not to branch: that is the question

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The two perennial debates we have in banking are a future that is cashless and branchless. Cash is going down, but is not eradicated; branches are closing fast, but still here. Are they necessary?

I raise this as I got two reports from strong and trusted sources in the past week, one that said branches are dead and the other saying they are very much alive. What’s your view?

To give you the two views, where to start? OK, I’ll start with the case for branches.

This comes from the US bank association BAI. In their report are comments like:

“While some have predicted decimation of branch networks after COVID, many branch experts say evolution, not elimination, is the better path.”

“Financial institutions should view branches not as transactional business centres but as relationship-focused customer experience stores.”

“Banks need to look at branches in terms of their brand.”

“There are going to be fewer branches, and the branches are going to be designed to be more representative of the trading area, with a sense of community and social responsibility.”

“[Branches] should be centres of more high-value activities. Sophisticated services that are provided on a face-to-face basis can build customer bonds and enhance the brand.”

On the other hand, a report from Self Financial suggests a significant change in bank  branch structures. According to their research, American bank branches will reduce from almost 83,000 in 2012 to less than 16,000 by 2030.

  • Bank branch numbers in the US have fallen by 6.5% since 2012
  • Based on current trends all bank branches could be closed by 2034
  • More than half of Americans believe online banks will outnumber traditional banks

Thing is that both reports and analysis are correct, as I’ve blogged many times before. In fact, back in the 1990s, I predicted that 90 percent of bank branches were not needed and that the ones that are needed are where the highest footfall occurs. Where’s that? Well, when not in lockdown, the centre of the largest cities, shopping malls and transport hubs.

This is because a branch purely exists today as a marketing tool. It is about brand trust. The concept of being able to walk into a branch and say SHOW ME THE MONEY. That’s all it’s there for.

It’s not about service, advice, transactions or anything else. It’s purely about trust in the banks existence and that it can be called into account when necessary.


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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