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Bankers give too much credence to futurists and financial gurus who warn that technology will render the in-branch experience obsolete.
May 5 -
In-store bankers are experts in finding creative ways to catch potential customers' attention. That's a skill that every modern bank employee needs to hone.
April 1 -
Banks have to invest in mobile technology in order to keep up with millennials. But bankers also need opportunities to rub shoulders with young customers and small, conveniently situated branches give them an opportunity to do so.
March 3 -
Financial institutions need to have good digital offerings, but they also need to find ways to stand out from the crowd. That's why branches will remain a crucial home base.
January 8
I was recently asked to become a guest faculty member at a graduate school of banking. While I was flattered, the famous Groucho Marx quote immediately sprang to mind: "I don't want to belong to any club that would accept me as a member."
But I then did welcome the opportunity to teach a course on keeping bankers and branches relevant in an increasingly online world. I couldn't help but smile, thinking of the first banking class I took over 20 years ago while working on an MBA.
The class made a lasting impression on me, but mostly for negative reasons. My instructor was exceedingly critical of banks and seemed to believe that the majority of folks running them were clueless.
It was in that class that I initially began using the phrase "hindsight genius" to describe people who spend a lot of time criticizing the mistakes that management at various companies made in the past. Hindsight geniuses like to imply that had they personally found themselves in such situations, they would have surely been wiser and more prescient.
But one of the things I most remember about that period was the strange course of events that led to my receiving the offer of my first banking job while taking the class. After class one evening, I asked my professor for his thoughts about whether I should take an in-store branch manager job.
His dismissive advice was that I should not accept the job. He confidently informed me that in-store locations weren't "real branches"; they were a fad that would disappear within a few years.
I remember thinking, "Okeydoke. Thanks for the pep talk, Doc!" Thankfully, I didn't take his advice. But as the years have rolled on, I've frequently remembered that interaction whenever younger bankers ask me for career advice. Note to self: Don't be that guy.
No one, regardless of their real or self-proclaimed credentials, has a crystal ball that reveals the future of our business. My old professor was hardly alone in his bad predictions. A friend of mine is fond of recalling a keynote address by a highly regarded "industry expert" who spoke at a national banking conference in 2001.
That respected speaker warned us that half of all bank branches would close within the next five to 10 years. His "data" (or maybe his Magic 8 Ball) said this was inevitable.
His presentation and predictions were very captivating and stupendously wrong. But being "loud wrong" apparently doesn't prevent some speakers from remaining authorities on our industry.
So, conscious not to get too far out over my skis, I suggested to my own students that the pertinent question is not whether bankers and branches will be relevant in the future. They will be.
The more germane question is whether or not the particular group of bankers in my class, and their specific branches, will be relevant. The answer is that it's up to them.
Most of the folks saying branches are headed for the scrap heap of history seem to believe that basic teller transactions are the primary reason that branches exist and the sole source of value for customers. As more of these basic transactions are handled at a distance via technology, these naysayers conclude that the value of branches must concomitantly decrease in customers' eyes.
Yet customer behaviors suggest otherwise. Convenient access to a physical branch continues to rank at or near the top of customers' priorities when they decide to choose or stay with a financial institution. This holds even more true for small-business owners.
Moreover, when customers say they want easy access to a branch, what they are actually saying is they want easy access to bankers.
I am as big a fan of new and engaging branch designs as anyone. But let's not kid ourselves. Customers do not visit branches to admire their design. They come because they have a transaction, problem or question they want a banker to help them with.
Yes, new designs are helping to create more productive work environments and aid in customer engagement. And smaller branch footprints with improved technology and multi-tasking bankers allow banks to offer their services in more places and do so more cost-effectively.
But at the end of the day, the quality of the branch experience is driven by the quality of our bankers and their personal interactions with customers.
It's certainly true that as customers conduct fewer basic transactions in branches, those branches will see reduced foot traffic creating the need for bankers to engage with people outside of branches and conduct more outreach into the communities. But improved technology and reduced transactional burdens also make these efforts more feasible than ever.
No industry is immune to evolution. But evolution does not mean elimination. A failure to evolve, however, all but guarantees elimination.
Technology is transforming the roles of bankers, not replacing them. And the relevance of branches and bankers is and will remain high.
Dave Martin is an executive vice president and chief development officer at Financial Supermarkets Inc., a Market Contractors subsidiary that offers design, construction, consulting and training services for retail banking programs. He can be reached at
