NAB to shrink size of branches
When banks were looking to cut costs in the 1990s, the industry sparked a political and customer backlash by making deep cuts in the number of branches.
Now, facing similar pressures to cut their expenses, banks have a slightly different plan. Instead of shrinking in number, branches are shrinking in size.
NAB became the latest lender to announce plans to cut the average size of its bank branches on Wednesday, as consumers embrace online banking. Chief executive Cameron Clyne said the move was part of a revamp of its technological systems to allow more "self service" by customers through online banking and smartphones. It will also place a greater emphasis on using its branches to sell financial services, rather than a "full service" offering.
"The mistake the industry has made in the past is assuming the migration to digital would in fact replace other channels," he said.
"They are complementary to those channels, but accordingly we are going to reduce our store footprint in metreage by 25 per cent, but not the number of outlets," Mr Clyne said.
Despite predictions bank branches would die off in the online age, figures show this has failed to occur.
Last year, banks opened up another 65 branches across the country, the largest expansion in three years, according to figures from the Australian Prudential Regulation Authority.
Last year Westpac also said it would lower the size of the typical bank branch by about 30 per cent as part of a revamp of its network.