According to two-thirds of bankers, in as little as five years from now, banks will no longer use high street branches as part of theirchannels.
Thehas accelerated the use of digital banking services across all age groups and hastened the demise of the traditional high street bank branch.
According to the Economist Intelligence Unit (EIU) report forTemenos, 65% of executives believe the branch-based banking model will die in five years.
According to two-thirds of the senior banking executives who responded to the survey, the latest, artificial intelligence (AI), and application programming interfaces (APIs), are the drivers of this transformation.
Significant banks have had aflow of branch closures since the cost-cutting measures following the 2008 financial crisis. This has gradually accelerated as digital channels, such as and digital challenger banks, emerged. But the dam broke when Covid-19 restrictions forced all income and age groups now familiar with online banking.
In January, when, it said the pandemic had “crystallized its thinking” regarding reducing reliance on its branch network to serve customers.
Just, Lloyds Banking Group announced the shuttering of a further 44 branches in the UK. The bank said: “Like many businesses on the high street, we must change for a future where branches will be used differently and visited less often.”
Earlier this, TSB announced the planned closure of more than 150 branches in 2021, with almost 1,000 jobs to go. It said the pandemic had accelerated a .
Across the Irish Sea, Allied Irish Bank announced plans to. It attempts to cut costs following a review influenced by digital banking and acceleration during the Covid-19 pandemic.
On the continent, meanwhile,Commerzbank and slashing one-third of its staff – about 10,000 – to cut costs.
Sweden’sby nearly half. At the same time, a merger at France’s Societe Generale, with the coming together of its retail business and Credit du Nord subsidiary, close.
Unlike during the financial crisis that began in 2008, banks are not closing branches simply to cut costs. Theychannels and financial technology (fintech) products. According to the survey, 38% of startups, according to this year’s survey, while 24% report participating in sandboxes to test new propositions.
“Burdened by physical branches and legacy systems, and with challengers offering attractive auxiliary products and often superior customer service, many established.
Banks will focus on improving customer service levels and use various partners for customer products and services. Nearly half (47%) of executives expect their businesses to evolve into ecosystems in the, with third-party products and services offered as well as their own.
Most (80%) of the bankers interviewed saidlevels rather than products.
Aalishaan Zaidi, global head of digital banking at Standard Chartered, said the. “The big shift for us was our belief that we could change fast if we wanted to,” he said. “We would have never done the partnerships we are doing now.”