If you have been following financial news for any point in the last couple of years, you would know that banks are facing a huge problem: store branches are closing by the hundreds. What were once commonplace sites to see in local communities are drying up faster than they’re being replaced. This shift is affecting all banks from major international organizations to local institutions.
The harbinger of this drastic shift comes in the form of technology. Every mobile app update, every online improvement leads to another bank branch closing – or so the logic goes. The ability for users to view their accounts, transfer funds and create budgets online cuts away popular reasons why individuals used to go to the branch. The innovation is such that many people no longer feel the need to leave their homes. While it’s true that more people than ever before are turning towards banking on their mobile phones or computers, there may just be hope for a brick and mortar store.
Despite the best efforts of developers to create an all-encompassing app, there are some services which consumers would prefer to do in person. According to USA Today, over 87% of consumers still enjoy going to their local bank branch. Some of the most common reasons for this decision centers on the availability of a bank representative to assist them with the more complicated financial tools of mortgages and retirement planning. The in-store environment provides an asset to local banks and better serves their customers.
The most commonly cited reason for banks closing their branch locations centers metrics. Either the location does not provide enough revenue to offset their costs, the cost to acquire customer is too high or there is not enough interest in the bank at a certain location. However, it’s hard to measure the gains branches offer through building relationships in the community. When it comes to banking finances, individuals are less likely to switch in the absence of a relationship. Having branch locations more intertwined in the community would allow better relationships to be built with potential customers, thereby increasing their gains. Should this fail, a branch location offers better street advertising than a billboard.
How, then, can branches still exist and provide value to their organization in a time of widespread store closing? By doing the following:
- Do more with less. As cliché as it sounds, having your employees think outside the box to entice customers to branch locations will only pay off down the road. Work to build relationships with individual patrons and work hard to prevent problems before they occur. With the number of banks available for them to choose from, offering a personalized and efficient customer service will help you stand out from the pack.
- Embed your branch with the community. Show how your branch location is one of the cornerstones of the community. Offer to help students at your local school learn the habits of smart finance. Sponsor a little league day. Partake in town wide events. Showing a commitment in your community will soon be returned to you.
- Excel both online and offline. Bank customers want more features available today than they did ten years ago; consequently, it’s up to you to provide it for them. Working to create both the ideal online and in-store experience will attract more clients than either way by itself and pave the road for your bank’s continued strength.