COVID-19 has rapidly accelerated the adoption of digital banking and created widespread uncertainty about the future of the branch network. Banks have scrambled to close branches, redirect customers and add digital capabilities as sales volumes tumble.
Most banks are still being very cautious about shutting branches permanently. That could certainly change if cost pressures intensify due to rising credit losses and a slow economic recovery. Faced with fewer opportunities for physical banking, consumers will continue the shift toward other channels, underscoring the importance of digital account openings and personalized outreach in a virtual world.
Novantas is tracking these trends closely and conducting regular surveys about branch operations. The information below is based on a survey conducted in June that received responses from 46 financial institutions, representing roughly 18,000 branch locations.
Branch Profile for Respondents
Fewer than 100 branches
100-200 branches
200-500 branches
Pandemic Trends
Teller transactions are down sharply from late 2019 as branches closed or reduced hours of operation...
...while digital sales are up sharply.
Decline in Teller Transactions
Source: Novantas SalesScape Comparative Analytics
Digital Sales
Source: Novantas SalesScape Comparative Analytics
Pandemic Trends
Teller transactions are down sharply as branches closed or reduced hours of operation...
Decline in Teller Transactions
Source: Novantas SalesScape Comparative Analytics
...while digital sales are up sharply.
Digital Sales
Source: Novantas SalesScape Comparative Analytics
WOULDA, COULDA, SHOULDA:
Banks regret not having certain procedures in place before the pandemic struck.
(# of branches)
Looking to the Future
Of the branches now closed, banks are being cautious about shutting them permanently, but….
…many are considering accelerating branch consolidations or expect their network to be reduced notably within two years.
May Remain Closed / Consolidated
Source: Novantas SalesScape Comparative Analytics
Branch Consolidation Considerations by Branch Network Size
Source: Novantas SalesScape Comparative Analytics, Banks could answer more than once per selection
How much smaller do you expect your branch network to be in two years?
Branch Network Size Change in Two Years
Source: Novantas SalesScape Comparative Analytics
Looking to the Future
Of the branches now closed, banks are being cautious about shutting them permanently, but….
May Remain Closed / Consolidated
Source: Novantas SalesScape Comparative Analytics
…about half are considering accelerating branch consolidations or expect their network to be reduced notably within two years.
Branch Consolidation Considerations by Branch Network Size
Source: Novantas SalesScape Comparative Analytics, Banks could answer more than once per selection
…about half are considering accelerating branch consolidations or expect their network to be reduced notably within two years.
Source: Novantas SalesScape Comparative Analytics, Banks could answer more than once per selection
How much smaller do you expect your branch network to be in two years?
Branch Network Size Change in Two Years
Source: Novantas SalesScape Comparative Analytics
How much smaller do you expect your branch network to be in two years?
Source: Novantas SalesScape Comparative Analytics
