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Clipping the Branch

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

56% of Banks

said teller volumes are down by more than
31% from Q4 2019

26% of Banks

saw digital sales increase by
more than 90%

Pandemic Trends

Teller transactions are down sharply as branches closed or reduced hours of operation...

Decline in Teller Transactions

Source: Novantas SalesScape Comparative Analytics

56% of Banks

said teller volumes are down by more than
31% from Q4 2019

...while digital sales are up sharply.

Digital Sales

Source: Novantas SalesScape Comparative Analytics

26% of Banks

saw digital sales increase by
more than 90%

WOULDA, COULDA, SHOULDA:

Banks regret not having certain procedures in place before the pandemic struck.

(# of branches)

Under 100
  • Better call-center technology
  • Better outbound calling
  • Cross training of branch staff
100-200
  • More digital capability and enablement
  • Shared banker laptops
  • Chat, video conferencing
  • Online appointment banking
  • Branch employees trained to cover call center
200-500
  • Increased authority limits
  • Instant issue at drive-thru
  • Remapping of call center lines into the branch
  • Plan to quickly move people to areas that match skill set
  • Mobile-acquisition programs
Over 1,000
  • Phone and internet-based selling
  • Flexible staffing
  • Verification of ID over the phone
  • Appointment setting
  • Work-from-home capabilities
Under 100
  • Better call-center technology
  • Better outbound calling
  • Cross training of branch staff
200-500
  • Increased authority limits
  • Instant issue at drive-thru
  • Remapping of call center lines into the branch
  • Plan to quickly move people to areas that match skill set
  • Mobile-acquisition programs
100-200
  • More digital capability and enablement
  • Shared banker laptops
  • Chat, video conferencing
  • Online appointment banking
  • Branch employees trained to cover call center
Over 1,000
  • Phone and internet-based selling
  • Flexible staffing
  • Verification of ID over the phone
  • Appointment setting
  • Work-from-home capabilities

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

Over 1,000
500-1000
200-500
100-200
Under 100

Source: Novantas SalesScape Comparative Analytics, Banks could answer more than once per selection

40% of Banks

said they were considering
accelerating planned branch consolidation / closures

How much smaller do you expect your branch network to be in two years?

Branch Network Size Change in Two Years

Over 1,000
500-1000
200-500
100-200
Under 100

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

Over 1,000
500-1000
200-500
100-200
Under 100

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

40% of Banks

said they were considering
accelerating planned branch consolidation / closures

How much smaller do you expect your branch network to be in two years?

Branch Network Size Change in Two Years

Over 1,000
500-1000
200-500
100-200
Under 100

Source: Novantas SalesScape Comparative Analytics

How much smaller do you expect your branch network to be in two years?

Source: Novantas SalesScape Comparative Analytics

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