An article by Sandra Sendigan from Singapore questions the relevance of branch banking in Asia as now mobile banking transactions surpass branch banking transactions in Singapore and a recent McKinsey report suggests that 8 in 10 consumers in Singapore are considering opening an account at branchless banks. Singapore banks are improving digital channels by integrating Fintech company offerings in marketplace lending and supporting virtual assistants via voice and text supported by Facebook Messenger, aligning with the phenomenal growth of WeChat and Alipay mobile payments use in Asia encouraged by more progressive government efforts toward digitalization in banks. As consumers increasingly prefer to bank digitally, branches will close and impact the property market. Yet, at least in North America, we have seen that despite the growth and growing preference for online and mobile banking, traditional branch banking still fulfills specific needs and, while needs to embrace new banking habits, face-to-face interactions are still important for advice, new products and services and for more sophisticated or high value transactions.
“The ongoing migration of financial services to mobile begs the question whether branch banking still remains relevant in Singapore as lenders could easily save up on rent and manpower costs by trimming down on their bloated branch network. The reduction in banking space is part of the global trend affecting the way we live, work and play – enabled by technology. Overall, there will be lower demand for office space as technology enables us to work anywhere, any time, and not just from offices.”
U.S. banks are also focused on improving digital and self-service banking channels and blending the channels, even in the branches and at ATMs. Mobile banking is indeed growing rapidly. In fact, 64% of U.S. consumers manage their account information or make banking transactions by mobile device, according to the 2017 CustomerMonitor Survey Series Channels survey fielded in November 2017. And, consumers increasingly prefer to use self-service banking than tellers at their own convenience when they can do so. Yet, more than 4 in 5 consumers still use full-service banks with branches and consumers still have more trust in banks with branches than those without a physical presence and are much more likely to consider full-service banks their primary FI. Mobile banking users are just as likely as average (71%) to have visited a bank teller within the past year, though the frequency of branch visits are declining overall. Retail branches need to adapt to the changing consumer needs for visiting the branch by supporting the use of mobile within the branch and offering more support, education and advice within the branch to help grow their wealth and make better financial decisions.
Overview by Karen Augustine, Manager, Primary Data Services at Mercator Advisory Group