As banking customers demand a more digitized, customer-focused experience, banks must evolve their traditional ways. To do this, banks around the world are choosing to partner in order to expand their physical and digital reach. Could this be the answer for banks struggling with physical location expenses and modernization of digital tools? Read on to learn more.
In the United Kingdom, Barclays, Lloyds Banking Group, and NatWest are opening shared mini branches for business customers. The first Business Banking Hub opened in Birmingham last week with five more set to open within the next few months. The branches will not be manned by bank staff, but instead machines provided by each company.
Wes Streeting, a member of the Treasury Select Committee, thinks that sharing locations is a good way to help give people access to branches, but that this is ‘small beer’ in the grand scale of branch closures. Partnering to make mini branches may be just what UK banks need after over 750 branches closed last year.
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Steve Rymers, the Director of the Financial Services Location Analytics and Data practice at Pitney Bowes, spoke with us about the innovation surrounding bank branches. Despite reports of their demise, Rymers reports that retail branches are still very important assets for financial institutions, especially if they can reduce expenses and optimize their performance.
“There are significant changes in the branch today, including the role of technology and how the consumer wants to use the branch. Given these changes banks need to continuously assess how they can leverage their physical footprint to maximize and maintain their competitive advantage,” said Rymers. While physical locations use to focus on transactions, branches are becoming a place for advice, consultative selling, and problem-solving focused on customer needs.
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SunTrust and BB&T announced a merger last month that will create the sixth-largest bank in the U.S. The merger was fueled by several factors, but one stood out – consumer digital demands. While mergers traditionally took place to grow branch networks and acquire new regions, today, the focus is on having the right branches paired with a strong mobile banking model and digital capabilities.
After the merger was announced, executives from both SunTrust and BB&T shared how the role of digitization impacted their decision. By pooling their tools, the newly formed bank has access to a variety of digital assets as well as branches in pivotal areas.
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