The age-old idea of a ‘branch on every corner’ seems to be changing
Bank of America, along with other US banks, are taking a long-hard look at their past goal of getting a branch on every corner thanks to the growth of mobile payments and banking. As you can well imagine, most customers now use their mobile phones to help sort their banking issues out. Many use mobiles to help pay for goods or buy items online, meaning there are less issues around their cards that need to be dealt with in-branch.
Speaking in a call with analysts over it’s fourth quarter results, Bank of America CEO Brian Moynihan said that “the definition of a branch is changing from what you’d traditionally think”.
It appears that nine per cent, up from seven in the previous quarter, of BoA’s chequeing transactions took place on mobile devices like iPads or iPhones. It’s impressive seeing as the feature was only introduced in “basically the third quarter of “, as Moynihan put it.
What this means is that banks are now having to reshape how they interact with their customers; largely through reducing their sprawling bank branches and opting for more tech-friendly support methods.
It’s telling that around 20 per cent of banking transactions are conducted using physical paper cheques, which is down from the 60 per cent that were used in the early 2000′s. Technology is pushing things forward in the banking and payments space, and it seems as if places like JP Morgan Chase are staying abreast of it.
While JP Morgan Chase has been expanding its number of branches over time, the US bank has been investing heavily in technology and sees mobile and online as one of the fastest growing area in banking.
Seeing banks as big as Bank of America and JP Morgan Chase being unnerved by (and acting upon) emerging payment technologies such as mobile banking and payments, it’s naturally a good sign that they are succeeding as a platform.
Across the pond in the UK, five banks have teamed up with Vocalink to produce a mobile payments and banking app that should work near seamlessly in buying online and – in the future – in stores too. It’s not a far-cry from what the US market should also be doing in this instance. Give the customers the flexibility to use the bank as they see fit. But perhaps the solution isn’t to cull your physical branches, but instead tailor your current ones while investing in mobile payments instead.
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