If you listen to certain media outlets, they’d tell you that the retail apocalypse has extended to the world of retail banking. Don’t buy it.
Yes, it’s true that thousands of retail bank branches have shuttered in the decade since the financial crisis. Many of these closures have come as a result of industry consolidation. Most often, mergers make financial sense when there is an overlapping footprint. This overlap allows banks to achieve financial efficiencies through closures. And yes, like everything else in our lives, digital and mobile technology has evolved to allow customers to complete many transactions that used to require a visit to a branch. So that makes the bank branch obsolete, right? Not so fast.
While deposits are a key indicator of bank activity, profitability is really determined based on the lending and service products these institutions can offer to their customers. Many of these products are advisory in nature and are best serviced in-person, in real time, in a branch. In a recent McKinsey study, an overwhelming 80% of customers in the US stated they prefer to use a bank branch for at least some of their banking activities, including getting financial advice, and better explaining products and services. More than half of those surveyed said they prefer a physical bank branch for all of their banking needs. Clearly, there is still a need for a traditional bank branch, even if what’s inside that branch is evolving to meet a digital age.
In Florida, an Atlantic client is at the leading edge of that growth.