There’s still life in the old branch

To paraphrase Mark Twain, the reports of the death of the branch have been greatly exaggerated. Patrick Brusnahan comments

Despite over 40% of the UK’s bank branches (since 1989) now closed, with over 2,000 of these closures in the last decade, there are still signs of life in the old boy.

Metro Bank, the UK-based challenger bank with a particular focus on branches, is set for a £1bn ($1.4bn) stock market listing merely five years after launch. In addition, Nationwide has just declared an investment of £300m to upgrade its 700-strong branch network over the next five years.

Banks in the UK are also beginning to utilise the Post Office’s huge branch network, currently totalling at 12,500 branches, to offer banking solutions to those in smaller communities.

These signs of life are not limited to the UK. Multiple banks worldwide are looking at moving branches into the modern era, including the Canadian Imperial Bank of Commerce, State Bank of India and DBS.

International involvement is also benefitting the United Kingdom’s bank branches. Rob MacGregor of UNITE believes that Spain-based Sabadell’s £1.7bn takeover of TSB could benefit TSB’s branches. According to MacGregor, the investment provided from such a large bank could give TSB the scale it needs to compete with the Big Four.

It is very easy (too easy, some might say) to predict that electronic and digital payments, provided by banks and non-banks alike, will shove the branch out of the picture. However, a large segment of consumers still prefer their branch.

According to a 2014 survey by the American Bankers Association, 21% of respondents prefer going to a bank branch than any other method to manage their accounts. This is actually a rise from the 18% recorded in 2013.

The future is not as bleak as some reports describe. If the branch is set to disappear, it certainly won’t be soon and certainly not without a fight.