Mark Schofield: Is the Bank Branch Dead?




The pace of change in banking will be surprisingly fast in the coming years. Mark Schofield, a partner in Bain's Financial Services practice, discusses three critical ways that banks can harvest digital dividends and create smaller, radically different branch networks.

Read the transcript below.

MARK SCHOFIELD: It's a common question: Is the bank branch dead? The simple answer is no, but it will be profoundly different, and the pace of change will be surprisingly fast. Those banks that are successful will harvest the digital dividend. That's lower cost, it's higher sales, and it's improved loyalty with customers.

The critical focus is to drive three changes in the branch network. Change number one is migrating high-cost service. Typically 70% of volumes in the branch are what we call bad and avoidable. How do we take those and migrate them to a digital channel that's an improved experience for a customer?

The second is digitizing the sales experience. In many markets, 50% of sales have already migrated to a mobile phone. How do we build a simple experience and teach our customers to use it?

And finally, how do we drive a radically different branch network? Again, in many markets, a third of branches have already been removed, and plans are underway for the next third. That's a radically different, smaller and more networked branch network.

The difference between success and failure is the approach to change management. We've seen many banks take a very different approach to delivering these changes in their network. It requires a customer-back focus. How do we design solutions specifically for our customers?

It requires empowering the frontline staff. How do we enable them to make the decisions they want to make at a rapid pace? And it requires an environment to drive radical change, a much higher degree of experimentation, improvement and refinement. Those banks that take a different approach to change will ultimately harvest the digital dividend and enable reinvestment in their business.

Read the related Bain Brief: Is the Bank Branch Dead?