Ditching the branch is a mistake, Forrester predicts

Banks that go fully digital as a result of COVID-19 could regret the move. “Banks shouldn’t abandon the branch but instead refocus it to drive customer and employee engagement,” according to Forrester’s “ Predictions 2021: Banking ” report. “They can reduce branch costs by being smarter about their footprint and technology as well as shifting to paperless and cashless branches.” [caption id="attachment_186708" align="alignright" width="300"] Image via Pixabay[/caption] Many banks are seeing decreased branch traffic and increased digital volume resulting from the pandemic and social distancing measures. Citibank, for example, added 270,000 new online accounts in May from customers that had no online relationship with the bank. Last month, a Plaid study found 80% of Americans don’t need a branch to manage their money. Whether avoiding branches completely will remain the status quo for the long term remains unclear. Many banks are already starting to rethink their branch strategies while not abandoning them completely. Citizens Bank, for example, plans to decrease its number of branches by about 20% . Customers can use a digital engagement tool before entering a branch so employees can handle customers’ issues more efficiently. WaFd, meanwhile, plans to turn its branches into something of a showroom for financial products. See also: Navy Fed, USAA win top CX rankings from Forrester The idea of downsizing the branch footprint seems to have taken hold in some of the biggest banks in the U.S. In fact, Truist and U.S. Bank both said during their third-quarter earnings calls that they plan to shutter branches , and Wells Fargo has not confirmed whether it plans to reopen temporarily closed branches. Forrester’s report also predicts banks will take a reputation hit in 2021. Many banks came to customers' aid during the pandemic, offering repayment grace periods. According to the report, a Forrester survey from May found 53% of U.S. adults who use the internet at least weekly said their bank had acted in their best interest. But this altruism won’t last as banks prioritize risk management next year, leading to an increase in foreclosures and a decrease in small business lending, the report said. “To avoid becoming the bad guys, banks must focus on customers’ financial well-being, revamp their collection journeys, and advance their debt management solutions,” the report read. The 2020 Banking Automation Summit Virtual Experience , taking place November 9-10, is a new event that will provide a platform for industry professionals to share fresh insights, tools, trends and strategies. The Summit will focus on how automation will transform banking, especially with regard to back-office operations, risk management, data science and utilization, customer experience and more. Register here .

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Ditching the branch is a mistake, Forrester predicts

Weekly Wrap: API-based data sharing and bank spending take center stage

HSBC leans into APIs to expand Cash Flow Forecasting tool

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