"Whilst we are still seeing new entrants opening physical branches, our research highlights that most developed markets across America and Europe are 'over-banked'. We predict that as a result of 'right-sizing' and embracing technology, 50% of retail branches in these developed markets will be obsolete in their current format by 2020.
Excess branch networks won't disappear overnight, but the trend will be one of a steady run-off as property leases expire. The challenge in this truly multi-channel world will be for global retail banks to actively manage their existing property portfolio and then to identify the right locations to maintain a presence or take new space. We will see far more emphasis on right place, right space and right price."
In North America, these trends carry the potential to help banks build customer engagement, said Stuart Hicks, President, Banking Industry Group, Jones Lang LaSalle:
"Banks are using a retail branch real estate strategy to make every consumer visit more meaningful than ever before," said Hicks. "Leading banks are leveraging emerging technologies, physical branch improvements and sophisticated customer relationship management to ensure that while the overall number of North American branches may be declining, each branch visit builds trust and customer engagement. Each branch is becoming better equipped to sell a wider array of integrated products and services, and thus improve profits as well as customer satisfaction."SOURCE Jones Lang LaSalle