Branched out: Fewer branches--Newly designed--Are a sign of the times

July 2010

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At a glance

PwC's viewpoint offers our firm's point of view on the bank branch network of the future and a framework for fundamentally improving the branch network and individual branch design to improve revenue and maintain margins.

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Alternative banking channels have matured over the past decade, along with increased customer demand for these alternatives. As a result, leading financial institutions are reexamining their physical branch strategies. With the current number of physical bank branches unsustainable, substantial reduction is needed. Failure to radically rethink branch strategies will saddle banks with an unsustainable cost structure and significantly reduce profitability.

The future branch will require profound changes to current operating models, infrastructure, and design. These changes should be part of an optimized network of branches to offset costs and increase revenue flows. Banks should undertake a holistic review of their branch networks, including examining their product mix and identifying cross-sell opportunities. This will help offset the costs associated with the branch network and increase return on investment.