Returning to the branch discussions, I picked up on Jim Marous’s recent podcast with Bank of America (BoA) which is headlined:
BofA is Building 150 New Financial Centres at $5 Million Each. Here's Why
The podcast focuses on the fact that BoA is opening new branches focused upon advisory services having almost halved its branch network over the past decade.
Great!
Or not so great?
Financial soothsayers like me have forecast that branches would shut for decades and, finally, they did. Branches would be replaced by self-service technologies, which they have. No one needs a branch to do transactions, and that is a truth. But, as I blogged the other day, humans do need human services because we are humans:
Why bank branches still matter
Human needs for human service (why branches matter, part two)
The thing is that most bank strategists state that we need to keep branches for advice. Wrong. We don’t need branches for advice. We need branches for human contact and trust.
Branches are purely needed to reinforce trust and, when it comes to money, trust is the most important factor.
These days, thanks to Claude, ChatGPT, Gemini and co, I can get advice everywhere.
PIC – Advice
But there are three critical needs that require branch access.
First, those who are uncomfortable online or in apps. According to the UK’s regulator, the FCA, 7% of UK adults do not bank online or use a mobile app. More than this, many people – forget demographics – are uncomfortable if they cannot access a human in a bank building.
According to a KPMG survey in the summer of 2024, more than 13 million customers (26% of account holders) in the UK still rely on bank branches for essential services and 64% of Brits said they would miss their local branch if it closed.
Miss.
Miss a branch.
Miss a branch if it closed.
Why would you miss a branch if it closed?
Because it matters.
It matters for trust. Not for transactions or advice. It is all about trust.
Let’s bring it back to one of my common themes. This is that the only thing more important than money in life is sex (a regular meme here for years).
So, let’s imagine that we created a debate about you don’t need a physical relationship with anyone anymore. We have sex robots that can service your needs. You don’t need a human in your life. You don’t need a human partner. You can get on brilliantly well with an AI robot who will do whatever you say and whatever you want.
Obviously, this is all possible, but wouldn’t you lose something? It’s called humanity.
So sure, we could survive without a relationship, without a partner, without physical sex or with sex with a robot; just as we could survive without a branch, without an advisor and without a human to talk to about our fears around financial security.
All of this is possible thanks to today’s technologies … but possible is not the same as probable or realistic.
The reality is that humans will always want to connect with humans, no matter how much fantastic automation is out there.
#dropthemike
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, 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...