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Five Questions to Ask About the Future of the Branch

November 3, 2015

Bank Director recently interviewed Mitchell Orlowsky, CEO at Ignite Sales and Ray Davis, CEO of Portland, Oregon-based Umpqua Bancorp on the future of the branch. The article appeared in the 4th Quarter 2015 edition of Bank Director Magazine.

According to the article, “The future of the bank branch is one of the most hotly debated topics in banking right now, spurred on by the adoption of digital and mobile distribution channels and a burgeoning fintech industry. It may be too early to write the obituary for expansive (and expensive) branch networks, and yet there’s little doubt that their relevance in the delivery of financial products and services is diminishing.”

Bank Director asked these five questions:

  1. Is branch consolidation a cyclical phase or is it here to stay
  2. What key changes need to occur for branches to remain an effective distribution channel?
  3. What is the viability of bank branches in light of mobile and digital banking as well as the emerging fintech industry?
  4. When it comes to marrying a branch network with mobile and digital banking channels, what do banks need to get right?
  5. What’s the one thing that a bank can do that will give its branch network a leg up over bank and nonbank competitors?

Orlowsky stated, “The bank branch is not dead. There are still many financial activities that are best done face-to-face, where the relationship matters. The most obvious example is small business banking—providing merchant services and lines of credit, among other things.

That said, banks are under a historic threat from nonbank competitors. The answer to surviving this is connectivity. The branch of the future will offer its customers an immediate connection, over video or other channels, to subject-level experts that can answer customers’ questions regardless of what product or service they’re inquiring about.”

“The biggest piece that’s missing from the puzzle is merchandising. If you use a bank’s mobile application or walk into one of its branches, there’s no way to discern the entire lineup of products and services it offers. This is the opposite of how conventional retailers like Gap work. In fact, banks are the only retailers that don’t use merchandising techniques to sell new products. This is a mistake. A bank’s objective should be to deliver the right product at the right moment to the right customer. And the easiest way to do so is to use technology to make the information readily available.

It’s been our experience at Ignite Sales that simply doing this can increase across sales by 15 to 20 percent.”

To read the entire story and Ray Davis’ responses, click here.

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