It has been reported that some 2,900 bank branches were closed in the UK in the past three years.  There is considerable debate going on as to why these branches have been closed; the likelihood is that the “bean counters” in their respective organisations have applied a formula and deemed them to be unprofitable.  
Certainly, based on my own experience most “bean counters” fail to fully allocate revenue, the IT systems simply don’t support proper branch profitability models where the costs are, of course, captured; but the revenues attributed to the branch are often dispersed around the bank’s network.  
The actual operational costs are lumped together without any effort being made to understand the actual “manufacturing costs” of bank products.  
It’s pretty depressing.  
In the US, I understand the Bank of America has actually developed a very interesting model creating financial services centres, which would bear further examination.
In our region, banks do seem to be continuing to invest in their legacy distribution models. There is a tendency to build on the existing networks bolting on new and perhaps digital propositions.  
Interesting comment the other day came from the governor of the Bank of England that “digitising existing products” does not necessarily get you “recognition for digitisation”!  
In my view, what Middle East Banks now need to be doing is to be conducting “root and branch” reviews of their existing distribution structures; this driven by structured customer research into needs and wants and really understanding their customer behaviours, attempting to gauge switching propensities etc.
One thing that is becoming clearer, certainly in Europe and the US is that Monday to Friday (Sunday to Thursday in the GCC region) opening traditional banking hours in traditional locations simply is not sustainable over the long haul. Banks need to really re-think this aggressively!
Of course in many ways the biggest challenge for banking organisations will be to actually flex their “culture” — the people and skills piece is such an intrinsic part of delivering tailored customer value propositions.  
Up till now, banks have been really terrible at actually achieving this, mainly given the aforementioned lack of true understanding of their customers.
The skills of the workforce have to be absolutely aligned with whatever new/digital proposition is being offered — there will certainly be winners and losers!
Additionally, the IT environments which in many banks are virtually held together with string, are going to be absolutely crucial in the bank being able to deliver on the new “world distribution model”.  
Again, the challenges are palpable, the costs potentially enormous and once again there will be winners and losers!




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