Almost 50 percent of existing retail bank branches will be obsolete as a result of changes banks will make to their branch networks by 2020, according to Jones Lang LaSalle.
Banks will assess their space requirements in developed markets, driven by increased consumer demand for technological innovation, flexible service capability and active management of retail environment presence, according to Jones Lang LaSalle’s Global retail banking: Key trends for retail real estate report.
The report says the decline in space requirements in developed markets will be offset by increased numbers of retail bank branches in developing countries, like Brazil, China and India.
Iain Mackenzie, Jones Lang LaSalle Asia Pacific Banking Industry Group head, says technology is the game changer.
“For banks in developing markets that are not as invested in legacy systems, there is significant opportunity to bypass the large, expensive and potentially obsolete physical branch networks and explore alternative channels that are flexible, mobile and tailored for their customers,” Mackenzie says.
“This ability to customize and the flexibility to bring innovations to market quickly may provide many banks in this region with a competitive advantage over their western counterparts, similar to what we have seen in the telecommunications industry.”
Key findings of the report include:
Retail banks’ increased focus on ‘multi-channel’ practices: banks focused on the right physical presence in the right place, supplemented by mobile and internet banking services
Increased customer segmentation: focusing efforts on which services to provide to whom, where and how
Hi-tech experimental branches: with 24-hour access to call centre staff through video conferencing and other technological developments, and a move to mimicking customer-centric retail environments
More attention to data storage requirements: increased online and mobile transaction volumes