2019: Year Half Over and Glass Half Full

Let’s look back on the first half of 2019, and then we can look ahead.

With 2019 now half over, we thought it might be worthwhile to revisit The Financial Brand’s article from the beginning of the year entitled, “Top Branch Trends for Banks and Credit Unions in 2019” and see if the commentary outlined in the article is still relevant. How is Branch Transformation taking hold at the mid-point of the year? Has the commentary held true? What does the (near) future look like?

Branch Closures

Our newsfeeds are still dominated with the announcements of branch closures. This may spell doom and gloom for an industry continuously accused of not modernizing fast enough for the evolving consumer sentiment, but the “death of the bank branch” is not really the story here. Under the catchy, clickbait-oriented closure headlines, the real story unfolds, telling of consolidation as a result of mergers and acquisitions and/or due to branch relocations. In fact, just under the branch closure articles may very well be a companion article talking about branch expansion.

Branch Expansion

The big banks (large national brands and dominant regional players) have announced aggressive expansion plans at the onset of the year, and those announcements haven’t died down at the year’s mid-point.

On the coattails of Chase announcing aggressive plans to expand into Philadelphia, the Financial Institution announced this Spring to open nearly 100 new branches across 9 major metro areas.

And now, Chase has just announced their new New York City Flagship Branch, meant to be the epitome of how they intend to do brick and mortar banking from here forward.

Along those lines, community banks and credit unions continue to look towards aggressive expansion plans, despite the shadow of digital banking, the allure of digital-only banking and the fear instilled in all of us when doom-and-gloom articles speak of a possible recession, etc.

In fact, here at LEVEL⁵, our Consulting and Real Estate divisions have never been busier. John Hyche, an industry expert often quoted in The Financial Branch article, has seen the expansion trends materializing and his book of business has never been more full. As cited in the article, one of the key drivers in community bank and credit union expansion is the evolving shift in Demography.

Demography Shifts

One of the main reasons we’re talking about expansion plans with our clients is due to the shifting geographies and needs of banking customers. Since we are continually seeking to deliver on the financial needs of the customers/members, we know that location is key and opening a new branch on the wrong street corner is a costly mistake.

It’s not even really about where things have migrated recently or currently. The proper approach to location selection is rooted in the right data approach to understand the need and identify not what’s relevant now, but what will be relevant tomorrow and in three years.

As stated in the Financial Brand article, LEVEL⁵‘s own John Hyche states, “Branches will continue to follow shifts in demography as new areas develop. These moves reaffirm the popularity and value of physical channels in establishing brand recognition and gaining market share.”

Branch Transformation

The final piece in this overall equation is to not turn a blind eye to trends, but to equally not rush into them haphazardly. The burden of the right digital approach is a heavy one for us all to bare, but purchase and implementation decisions shouldn’t live in a box. The right mix of Digital Signage, Full/Assisted Self Service, Kiosks, Tablets, etc. need to be deployed based on the right strategy and how they will ultimately help enhance the overall customer experience based on the way you do it.

If the year is continuing to take shape and you’re interested in learning more about branch expansion, branch transformation and the right approach, Contact Us today to get the conversation started.