The reduction of offline bank branches has become an inevitable trend.
According to data from the State Administration of Financial Supervision, a total of 3,192 commercial bank outlets will announce their withdrawal in 2023; According to incomplete statistics, from January 1, 2024 to June 21, 20224, a total of 1,401 bank outlets withdrew, while the number of institutional withdrawals in the first half of 2023 was 1,210, and it is expected that the number of bank branch withdrawals will expand in 2024.
The imbalance between input and output has become the core reason for the elimination of bank branches
Bai Wenxi, vice chairman of the China Enterprise Capital Alliance, once said: "The contraction of bank branches is mainly affected by factors such as intensified market competition, business model transformation and technological development. "The intensification of market competition has made it necessary for banks to further reduce the cost of benefiting customers, and with the continuous development of various financial technology methods such as digitalization and intelligence, banks are paying more attention to online services and further expanding their business to emerging technologies such as the Internet, smart wealth management, and mobile payment, resulting in a further decline in the number of physical outlets.
In addition, in addition to concerns about changes in costs and market demand, changes in regulatory policies may also lead to a sharp decline in the number of bank branches. In response to the strategy of financial assistance to rural areas, bank outlets began to consciously sink and expanded the layout of new outlets in townships and counties. Titanium media APP analysis of the distribution of closed outlets found that most banks will choose to close some outlets with poor efficiency or overcrowded arrangements, for example, according to the tip, Shanghai's Xuhui District and Jing'an District have closed many branches of large state-owned banks and joint-stock banks.
According to the staff of the outlets to the Titanium Media APP, there are three main reasons:
First, the outlets themselves are not large, and the business volume is limited. The outlets were originally set up to serve the community, but there are larger and more comprehensive outlets nearby, and now there are fewer and fewer people who need to go offline to handle business, and there are often few people who come to do business in an afternoon.
Second, for cost considerations, they feedback, "for this kind of small outlets, there are fewer people who come to the outlets to handle business, and employees have to carry card KPIs, etc., and can only barely reach the standard every month, everyone will tend to go to the nearby large outlets for business handling, and those who come to small outlets are generally suddenly in a hurry or old customers, in this case, pulling them to do business is undoubtedly 'offending' people." ”
Third, the process of handling business at the counter is often more complicated, and in many cases, for some businesses that can be operated with mobile banking, the lobby manager will also choose to guide customers to carry out mobile banking operations, and over time, customers have mastered more autonomy in operation. In addition, due to the need for manual inquiry, printing receipts, leadership review and other multi-step processes, outlets may be queuing, and small outlets often have a small number of counters, once there is a person business jam, it will lead to the back customers need to wait, which is also the reason why customers are reluctant to find small outlets.
Generally speaking, the efficiency of small outlets is relatively poor, as an outlet that needs to invest millions or even tens of millions of maintenance every year, and even cannot reach the break-even, so the exit of this type of outlet is also expected.
For these employees who have been laid off outlets, Titanium Media APP also has an in-depth understanding of their whereabouts, they said that although the bank's outlets have been abolished, but in order to support the two major strategies of large retail and transaction banking, the bank will also choose a new place to establish new outlets, taking Shanghai as an example, employees said that the bank will give them the choice of whether to accept the outlets in Shanghai's farther districts or to larger outlets, of course, this also has to go through the daily performance ranking, internal consultation before they can have a "stayed" place, For employees who are not so outstanding, they may not escape the fate of being optimized. It can be seen that after such a round of screening, the talents of small outlets can also be concentrated in large outlets or supported to distant areas, which can be regarded as a new round of optimization of bank talents.
Banks need to explore a new branch layout system, and technological, specialized, and innovative outlets may emerge
Nowadays, more and more bank branches have begun to enter the intelligent, artificial intelligence machines are also increasing, and even some branches that are at the forefront of technology have robot services, but this does not mean that AI technology will completely replace manual labor. It is foreseeable that in the future, the development trend of banks is that standardized work will be replaced by machines or AI, and non-standard work or work that "cannot be understood by AI" will still need to be done manually.
In this context, the adjustment and optimization of bank physical branches is inevitable, and in the future, bank branches will be closer to customer service and business innovation.
First of all, from the perspective of type, different types of banks will adopt differentiated layout strategies. According to historical data, the number of branches of large banks and joint-stock banks shows a trend of withdrawal and optimization; The number of outlets of urban commercial banks has expanded significantly; The number of outlets of small rural financial institutions has shrunk to a certain extent, but the downward trend is not obvious.
It can be seen that large banks are already saturated with branches, and the increase in business and revenue cannot be obtained by the increase of branches alone, on the contrary, the elimination of some branches will bring about an increase in marginal benefits. Regional banks are still in a position where they can still rely on regional advantages to expand, and banks can innovate products according to their own regional and economic characteristics, while this type of innovative products still need network and labor support in the short term; Small banks are relatively "struggling" at this stage, firstly, because their digital development is far less than that of large banks, and secondly, the degree of product innovation is far less than that of regional banks, but their advantages are still sufficiently sinking, compared with large cities, counties still need more offline banking services, which is their current focus, but they still need to seek change in the long term.
Second, from the perspective of model, bank outlets will no longer be limited to traditional financial services, and more technological, characteristic and innovative outlets will emerge one after another. Banks will rearrange their branch distribution to distinguish between three types of branches in economically developed cities: boutique, ordinary and light. With the boutique outlets as the center, there are several ordinary outlets around the periphery, and each ordinary outlet is divided into several light outlets, so as to establish a network of outlets in the city and make the distribution of outlets more reasonable. Boutique outlets should provide the most complete service system, with high-end services, high-tech applications and high-quality environment, etc., in which the allocation of personnel should also be the best, mainly in providing professional and personalized financial services, so as to attract more customers, and the latter two types of outlets gradually decrease according to the situation of each bank. Such a construction system can not only cover the entire city, but also highlight the diversified services of the bank while facilitating the people.
In third- and fourth-tier cities or cities at the county level and below, the layout can be simplified, and a boutique network can be set up in the region, and a number of ordinary outlets can be set up at the city level, focusing on the layout of multiple light outlets and then crowd areas. This construction method is more in line with the needs of the masses in different regions.
Third, from the perspective of scenario application, the integration of branch finance, life and industry is the innovation focus of banks in the future, and in recent years, many banks have focused on scenarios such as bank-government interconnection scenarios, pension innovation scenarios, and community scenarios for the benefit of the people. In addition to co-building service platforms with these less risky channels, banks can also explore cooperation with specific industries, such as those strongly supported and developed by some countries, such as the new energy industry and artificial intelligence industry, and connect their upstream and downstream. In the mode of scenario innovation, bank branches can better obtain a series of customer groups, so as to innovate businesses that are more suitable for this industry and effectively "stick" to customers.
Finally, from the perspective of large-scale supervision, in order to ensure the smooth operation of bank finance and vigorously support the real economy, the regulatory authorities need to continue to improve the assessment and regulatory requirements, strengthen the assessment of the inclusive layout of outlets, encourage inclusive financial services, and strengthen the positive incentive mechanism of banks to help farmers at the policy level. For the newly set up branches in remote areas and poverty alleviation areas, the corresponding inclusive assessment indicators should be set up, linking the economic quality of the area where the outlets are located and the number of people served by the outlets, the type of services, the amount of services and other indicators, and the follow-up policy pilots and the actual results achieved by the special bonuses for the development of inclusive finance to subsidize the banks, so as to encourage banks to increase the layout of inclusive outlets. (This article was first published in Titanium Media APP, author|Li Jingying, editor|Liu Yangxue)
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