RIP, branch banking?

Well not quite, but today Brett King, founder of yet-to-be-born online banking storefront Movenbank, released his latest book: Branch Today, Gone Tomorrow: The Case for the Death of Branch Banking that will surely investigate the channel’s future.

From Amazon’s description of the book:

Branch Today, Gone Tomorrow is a detailed, multi-faceted business case for the reprioritization of branch banking in the channel mix. It explores economics, behavioral shifts, trust issues facing banks, new retail distribution models and drivers challenging the branch-centric models of yesteryear. Branch Today is not about getting rid of every bank branch you have. It’s about understanding how banking changes when branches are no longer at the centre of acquisition, service and channel strategy.

Though we have yet to read the book, Bank Innovation recently spent some time with King to discuss the differences of online banking versus branch banking — one of the themes touched in his work. During the call, he gave some airtime to how brick-and-mortar branches in the U.S. have less traffic, which has large implications for lenders’ business practices.

“The average number of visits to banks is shrinking,” King tells Bank Innovation. And because of the shift in utilization of channels, banks will begin to add more robust services to their digital offerings to accommodate customer demands.

“You will start to see a big push for faster fulfillment of customer needs [without physical interaction],” King says.

That push will also stem from the fact that there are a lot of practices at physical branches that simply don’t matter much any more.

Take a driver’s license. Just because a consumer enters a branch and uses a driver’s license to indicate his identity fails to guarantee the person is who he says he is, cites King. That’s why King believes a big overhaul is needed in making physical artifacts unnecessary for financial transactions, although he readily acknowledges that accomplishing that objective will take quite some time.

We agree with this prediction. JJ Hornblass blogged on the shifts in bank branches just last week, arguing that it is simply impossible for banks to consider their branches without also pondering the entire gamut of their retail banking operations like mobile and online banking. There appears to be a caveat to that. To date, boasting physical branches give banks some sort of street cred with consumers. BBVA Compass’s Jennifer Wilson, for example, alerted us that the bank gains its greatest number of online customers from the state where the bank also has the most branches.

“The branch network is huge factor in how well customers know us,” Wilson says.