OPINION: Banking branch services replaced by smartphones



“The times, they are a-changin.”

In a recent article, I discussed how the smartphone is killing the retail store. 

While this was stated a little “tongue in cheek,” there seems to be some truth that recent technology, namely our smartphones, is changing the way we shop and changing business in America.

Now, it seems that branch banking is taking a hit. 

The second largest U.S. bank, Bank of America, recently announced another round of layoffs by the end of this year. 

And, that’s on top of the 12,000 cuts they made last year.  

Morgan Stanley is getting into the cutback game as well. 

Their chairman and CEO, James Gorman, recently stated that the bank, “expects to end 2012 approximately 7 percent lower across the firm than the end of 2011.”  

Citigroup’s CFO recently stated that their bank has already cut $1.3 billion in expenses this year.  

Additionally, Wells Fargo is getting into the act. 

Just recently, they’ve announced a yearly expense reduction of 7 percent, including a real estate reduction of three million square feet.  

Because of this trend, we now have fewer branch banks than we did in 2007, when bank locations were growing 2 percent per year.  

As I admitted being a part of the smartphone retail phenomenon by using my phone to price shop amazon.com from inside Barnes and Noble, I now must admit to being a part of this new banking trend. 

I rarely go inside a branch anymore. With smartphone apps and the use of an inexpensive check scanning machine, I’m able to bank from my kitchen table.  

All my check writing is done through online banking; again, at my kitchen table. 

Obviously, this technology doesn’t mean the death of the branch bank. 

What it does mean will be changes in the way we bank. 

Fewer drive-thru windows are very likely, as staffing (and the real estate) for this dwindling needed service is becoming expensive compared to its return on investment.   Banks will continue consolidation in an effort to cut expenses. 

Branch banks that cater to the retail customer will continue to go vacant and will need to undergo repurposing.  

The good news is that most branch banks have great real estate locations and will be easily absorbed into different uses. 

Because some customers will begin to feel “like a number, instead of a person” with the large bank format, there will be a desire from them for more personal service. 

To fill that gap, community banks will continue their rise to the surface.

As we have seen already, to survive in an ever changing market, the branch bank will have to reinvent itself to cut expenses while providing service that the customer wants.  


Brian Patton, CCIM is a commercial real estate broker, author and speaker. He can be reached at 770-634-4848 or via his website:  www.CapitalListings.com.

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