An article on closing bank branches and their cost reduction benefits was put into question by a Bain & Co. study, as reported by The New York Times. Banks are taking advantage of the consumer's increased use of mobile phones to do their banking by closing branches, thus reducing costs.
Bain's study raises questions that branch closings may have a negative long term impact on these banks.
The argument is that most customers who engage in mobile banking are doing so already. Pushing the remaining branch customers to utilize mobile banking could further impact the banks ability to cross sell its other services.
Bain's study also found that customers often use a branch closing as a reason or opportunity to switch banks.
The important point is to recognize the risk that may exist in branch closing and do a thorough analysis of the possible impact, and decide which direction is in the best interest of your organization.
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