Saturday, 23 September 2017

Information and commentary for the small business banking industry

Why banks shouldn’t cut branches

02 Sep

There has been a lot of press lately about digital banking, the move to mobile, and banks needing to move with the times and slash their bulky overhead structures.

Many banks have taken this on board and decided the easy target are branches and staff. Remove 200 branches, and the 2,000 staff that go along with it, and job done.

But in my view that’s not always the right option. A bank has an obligation to the community it services, and they shouldn’t treat them as retail stores that if they under perform financially, they close. They are missing the point; lots of small businesses still need somewhere to take their cash sales, confide in someone when in financial stress, or plan when experiencing rapid growth and opportunity. I wouldn’t close branches in small rural towns, or in communities where small businesses are the bedrock of employment. Yes in larger cities if you have branches over lapping. But a branch network should be just that; a network where the profitable branches help support the branches that may not hit a magical metric. Banks tend to slash costs for shareholder value and stock price. Maybe they should look at slashing those internal costs from a small business customer perspective first.


GSCirc

Glen Senior
Glen is the founder and CEO of The Small Business Company, a New Zealand based agency that specialises in helping banks communicate with small businesses through content marketing. He has written a number of books on small business principles and is a sought after consultant and conference presenter.

« »