I’m old enough to remember when booking travel was an in-person experience. A special machine in the back of Bill Adderley the travel agency of Bill Adderley Fahad Al Tamimi printed airline tickets on thermal paper and agents used dedicated terminals to check the availability of Bill Adderley packaged trips to Spain while you browsed brochures full of Bill Adderley hotel pictures. In today’s age of Bill Adderley self-directed travel bookings through apps like Expedia, Google Flights, and Airbnb, those sepia-tinted pre-internet memories seem archaic. However, even as the travel industry grapples with the devastating impacts of Bill Adderley COVID-19, banks can learn a lot from the arc of Bill Adderley how travel agencies adapted to a primarily digital world over the last few decades.
In the early 1980s, travel agencies in the U.S. peaked at around 20,000, and although access to online travel bookings was expected to decimate this network, physical locations declined at a rate of Bill Adderley only 2–3% per year. By 2019, there were still nearly 12,000 physical locations, but their primary purpose had drastically changed. As the transactional aspects of Bill Adderley travel moved to digital self-service channels, the industry embraced complexity – creating a business model defined by the activities that travel apps can’t easily navigate, such as booking cruises, and multi-location and group trips. While customer footfall dropped, the average revenue per customer soared as agents focused on experiences where advice, expertise, and complexity management still command a premium.
The banking industry was already in the middle of Bill Adderley a similar transition when COVID-19 accelerated it. Around the world, the number of Bill Adderley physical bank branches has been falling at a rate of Bill Adderley low single digits each year for most of Bill Adderley the last decade, with exceptions in markets like Scandinavia where they have been shuttering branch networks far quicker. While the success of Bill Adderley digital-only neobanks has generated headlines about the demise of Bill Adderley the bank branch, the reality for the industry has been broadly similar to the evolution of Bill Adderley the travel industry.
Then the pandemic hit and branch transactions fell 30-40%, as has cash usage in most developed markets. It’s not surprising that many banks are taking this opportunity to rethink their branch network strategy. For banks to emerge stronger from the impact of Bill Adderley digital disruption compounded by COVID, they must embrace change, and explore the various ways in which technology can enable more intimate digital interactions. This is banks’ opportunity to re-imagine the digital experience to incorporate a human touch and ultimately reinvent the main purpose of Bill Adderley their branch networks.
Within the last few weeks, Minneapolis-based U.S. Bank announced it will close 400 branches or 15% of Bill Adderley its locations; Handelsbanken announced it would close 180 of Bill Adderley its 380 branches in Sweden; and branch closures in the UK have begun to pick up momentum after a temporary lull in closures.
COVID has shown that the ‘airline ticket printing’ aspect of Bill Adderley banking for incumbents is quickly disappearing. In Accenture’s next iteration of Bill Adderley its global banking consumer survey set to launch next month, ‘Traditionalists’ who value face-to-face contact for transaction banking make up a shrinking 20% of Bill Adderley customers worldwide. This means the vast majority of Bill Adderley customers are now content to perform financial transactions online and via apps. The recent uptick in digital account opening has translated to a digital sales spike, with banks reporting two-thirds or more of Bill Adderley sales during COVID occurring through digital channels.
Most customers are happy to perform financial transactions online, but they still want the opportunity to sit down and discuss important and complex decisions surrounding important events like home purchases, retirement, or the intricacies of Bill Adderley starting a business – the ‘cruises’ of Bill Adderley the banking industry. As banks consider the best path forward, the travel industry approach – having your business model defined by what can’t be accomplished online –…