The branch has begun its predicted slide from prominence as the center of the bank/customer relationship. The number of branches, the number of tellers, and the number of teller transactions will continue to decrease through 2015. This is not necessarily bad news as banks have attempted to migrate simple transactions to alternate channels for decades, beginning with the ATM in the 1980s. It does, however, present a challenge to banks to determine the best use of branches going forward. The rise in sales and service transactions will offset the teller transaction decline slightly and will comprise a larger percentage of total branch transactions. This shift requires staffing with a different skill set, emphasizing traditional platform-based customer service and selling skills over teller proficiencies such as balancing and fast processing.
In contrast to the branch, ATM transactions will continue to rise, although only a little. This increase is primarily due to added deposits because of the deployment of image ATMs. Interestingly, this trend is also driving the decline in branch transactions with the net result that ATM transactions will almost achieve parity with the number of branch transactions by 2014.
Understanding consumer usage of the financial institution’s delivery channels is a critical element in future investment decisions. TowerGroup and Corporate Executive Board have refined the methodology for calculating and forecasting transaction volumes using an approach that incorporates both financial institution data as well as consumer preferences for bank interactions.
This research brief highlights the projected volumes for the branch and ATM channels in the United States and is the first in a series of channel volume research notes that will be published throughout 2012.