Smaller is beautiful for bank
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, on Wednesday, plans to cut the average size of its bank branches, as consumers embrace online banking.
Chief executive Cameron Clyne said the move was part of a revamp of technological systems to allow more "self-service" by customers online and with smartphones. It will also place a greater emphasis on using branches to sell financial services, rather than a "full-service" offering.
"We are going to reduce our store footprint in metreage by 25 per cent, but not the number of outlets," Mr Clyne said.
In 2012, banks opened another 65 branches nationwide, the largest expansion in three years.
Frequently Asked Questions about this Article…
NAB said it will reduce the average size of its bank branches, cutting store metreage by about 25% while keeping the same number of outlets. The move is part of a technology revamp to support more online and smartphone self-service and a greater sales focus in-branch.
Faced with cost pressures and the rise of online banking, banks are trimming the physical footprint of branches rather than cutting outlet numbers. The article notes this is a different approach to the 1990s, when deep branch closures sparked political and customer backlash.
Banks are updating technological systems to allow more 'self‑service' through online platforms and smartphones. That shift lets branches focus more on selling financial services than offering a full in-branch service menu.
No. According to CEO Cameron Clyne, NAB intends to reduce branch metreage by 25% but will not reduce the number of branch outlets.
It means branches will be more focused on advisory and product sales rather than providing every routine transaction in-person, since routine tasks will increasingly be handled via online and smartphone self-service.
Everyday customers can expect more transactions and basic tasks to move online or to mobile apps, with in-branch visits increasingly geared toward advice and product discussions as branches become smaller and more sales-focused.
When banks made deep cuts to branch numbers in the 1990s, the industry faced a political and customer backlash, which is why current changes focus on reducing size rather than outlet numbers.
Yes. The article notes that in 2012 banks opened another 65 branches nationwide, the largest expansion in three years, even as they begin to reduce average branch size.
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