New research confirms that the bank branch remains essential, despite the rise of Internet banking.
Despite the expansion of online banking services in recent years, Datamonitor’s new report, ‘eBanking Strategies in Europe 2002’, finds that the bank branch remains an essential part of a bank’s offering. Consumer research held across six European countries found that the Internet is only the third most commonly used means of purchasing or arranging banking services, behind phone calls and personal visits.
Casting further doubt on any suggestion that the bank branch has had its day, almost 80% of European consumers state that a personal visit to a branch is their preferred method for dealing with banking products.
Such is the importance of branches that some standalone Internet banks are likely to establish some form of branch presence in the near future. These new branches may not appear in the form with which we are currently familiar, as tie-ups with retailers are likely. In Sweden, for example, SkandiaBanken has launched a new online bank in partnership with the Coop, which will involve it developing a presence in supermarkets.
Yet at the same time, Datamonitor finds providers generally remain optimistic about the proportion of their business that will be online in 2002. For example, around 28% of retail banks believe that they will handle more than 60% of current account and credit card applications online by 2002.
The strategies of many an Internet bank were based on the idea that the death of the branch was imminent. However, this research confirms a growing realization within the eBanking sector that this is not the case. Although branch numbers are still falling, it is now recognized that the branch assumes an important role as part of a bank’s multi-channel distribution strategy. To provide only one channel, whether it is the Internet or the branch, is to appeal to only a limited proportion of the consumer market.
