The trend of real estate, banking branches might take a while to go defunct. There had been theses that stated that e-banking would make brick and mortar branches defunct. However, that might be an overrated suggestion as per the current trends. This is as per FDIC’s chief economist who has pointed out that people still walk in even if e-banking initiatives and features have increased.
Banking behavior trends
Banks have increased the use of online tools, but as the trend goes, US customers have not given up on their regular visits to the nearest branches of their banks. The industry has been trying to slim down and reduce costs of operations, but this kind of trend is slowing down this initiative. Most banks have taken up the initiative to reduce the number of branches they operate. It has been reduced by an average of 6% since 2009 when the operations peaked. This is as per data accumulated by Federal Deposit Insurance Corp. Last year there were 93, 283 branches that open which is the lowest level achieved in a decade.
Initiatives taken by banks
Analysts however have examined the data that banks have provided and stated that banks need to do more to reduce the pressure that has built on revenue. With low interest rates and demands coming in from regulatory authorities more cost cutting initiatives need to be taken. The number has fallen for FDIC insured banks. The percentage is 25% more than how much industry assets have increased over the same period. There is more room for consolidating branches in the near future.
Bank executives, however are seeing a different picture emerge. They see that the branches are crucial when it comes to getting new customers as well as increasing business opportunities with new ones. As per them, if several branches are closed, it would hurt revenue more than helping to reduce costs of operation. Jonathan Velline, head of the store and ATM strategy in Wells Fargo states that, customers still want to walk in and do most of their transactions and that is going on at a consistent rate even today. This is a view that is shared by many other banks. Many feel that online banking definitely helps to complement traditional banking services, but going digital fully will not serve well as most customer interactions and queries need to be handled face to face.
What other countries are doing
If you look at the US banking scenario, it is in the midst of how developed nations are working towards slimming down operations. This is as per the data published by the International Monetary Fund. More branches have been cut in countries like Canada, France or Germany while other aggressive countries that have lost out branches are Italy, Ireland, Greece and Spain. Find a related Banking Article Here, Banking Crisis To One Of The Oldest World Bank. There are other factors that need to be considered as well as there are certain banking behaviors that are unique to different countries. In case of US most customer issue checks and need them to be processed by the branches.