Tuesday, August 15, 2006

[money] in the uk, as in the us, bank branches are back in vogue

And about time too! Did it take them all this time for the penny to drop?

Did it really take banks and others in the public services community this long to understand the principle that customers need a name and face to deal with when they agree to hand over their hard-earned to an institution?

Did it really take institutions this long to understand that ordinary people fall into two categories - those who delight in the swift, web based money shifting and others, like me, who like to take our passbook to a branch and speak with Shirley or Mr. Jones and feel secure that our money is in the right hands [irrespective of the reality].

HSBC are soon to open "megastores", HBOS and Abbey plan their biggest expansions for decades but Woolwich branches are disappearing.

"Not all branches are in the right places or the right size or have the right things, but the banks are definitely in love with branches because the public are still in love with branches," said Nick Sandall, head of retail banking at advisory firm Deloitte.

"There's been a mindset change," said Mark Weill at Mercer Oliver Wyman, the financial services consultancy. "If you go back to the height of the dot-com frenzy then it's a big change. At that point banks saw their branch as a dead weight - a costly legacy - and they were really running their branches down."

Now, he said branches are back at the heart of the customer offer, supplemented by Internet and telephone services, and banks are investing in them again. Plans to expand the branch footprint mirror a trend seen in the United States in the last three years following years of shrinkage. At the same time, banks are trying to gain an edge with new, concept branches with a sharper image.

Perhaps most dramatic will be HSBC's plan to open five megastores, which likens to computer and music firm Apple's flagship stores. HSBC's megabanks will be about 35,000 square feet and include a coffee area, Internet access and meeting rooms.

A more typical branch of the future is also likely to be open-plan and brighter, with music, Internet terminals, designated areas for small-business banking and more room to discuss personal products in private. Banks are also distancing themselves from a "stuffy" past -- such as Barclays' move to rename its cash machines as a "Hole in the Wall".

They are already following retailers to out-of-town retail parks, and that trend could accelerate, while opening hours are getting local flexibility, with branches near busy train stations opening early to suit commuters, for example.

More than half the respondents in a Britannia Building Society survey released last week said not being able to choose whether to use a branch, the Internet or phone was the biggest failing of some organisations.

The Big 5 closed more than a third of their branches between 1989 and 2003, according to research by the University of Nottingham, driven by cost cutting, including the Internet banking push. But now Halifax and Abbey plan to open as many as 100 new branches each in the next few years.

Some analysts question why the consolidation of Woolwich - bought six years ago - took so long, but after the infamous closure of 171 branches on one day in April 2000, Barclays and other banks have been sensitive to bad publicity.

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