A new retail report releasedby Jones Lang LaSalle emphasises that changes across the global retail banking environment continue to be driven by political, economic and technological trends.
Robert Bonwell, CEO EMEA Retail at Jones Lang LaSalle, said: “The perfect storm facing the global banking industry continues unabated. However, within the kaleidoscope of increasing regulatory, legislative and legal scrutiny, retail banks face the greatest opportunity of all retail sectors to unlock the power of their real estate networks.
"New retail formats and new technology offer diverse options for those looking to drive efficiency of legacy branch portfolios, enter new markets or increase their competitive advantage. The challenge is to ensure that accelerating retail bank real estate change remains a priority and gets the attention it deserves.”
The report found that retail banks will have increased focus on “multi-channel” with banks focussed on getting the right physical presence in the right place supplemented by mobile and internet banking services.
There will also be increased customer segmentation focussing efforts on which services to provide to whom, where and how.
Hi-tech experimental branches with 24 hour access to call centre staff through video conferencing and other technological developments and a move to mimicking customer-centric retail environments, is another likely outcome.
While there will also be more attention to data storage requirements and increased online and mobile transaction volumes.
James Brown, head of EMEA Retail Research & Consulting at JLL, said: “Historically a retail bank’s sole customer sales and service channel was through a large branch network. The rapid ascent of telephone, online and now mobile banking continues to accelerate change and innovation into the retail and banking industry.
“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 at Jones Lang LaSalle.
And he added: “Banks are using a retail branch real estate strategy to make every consumer visit more meaningful than ever before.
“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.”
