Chapter 3Banks That Build Their Brand without Branches

Most banks still rely on their branch infrastructure for the vast majority of revenue and customer acquisition today. From the basic requirement many banks have for in-person, face-to-face identification and the legacy signature card, many banks find these processes very hard habits to break. However, there are already many banks that have not only cracked this problem, but get the majority (and, in some cases, all) of their revenue from non-branch sources.

I often hear the argument that customers still prefer to open an account or sign up for a mortgage in a branch, but what if banks are biasing this behavior and actually missing out on major new sources of revenue because they’re simply not adapting to changing customer behavior?1 What if those assumptions are wrong, and others are now building a business that will take significant market share from incumbents that think this way over the next few years?

Mobile use is exploding in the banking scene. If you are a retail bank today in the developed world and you don’t have a smartphone app for your customers, you are an exception. Even in countries like Mexico, China, India, and Russia, smartphone banking is growing at a faster rate than in the West.2 Certainly almost every bank in the world today has some form of Internet website and Internet banking capability. However, for most banks, the web and mobile are still considered costs—platforms that certainly improve service ...

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