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Brett King and the Death of the Branch: Part 3

The Bank 2.0/3.0 author concludes with how the bank accounts digitization has an inevitable result for bricks-and-mortar branching.

By Brett King | Updated on April 24, 2013

There has been some great analysis done on branch profitability over the last few years, and in markets like the US the data means we can very precisely predict when a specific branch is likely to close in the near-term. It turns out there are some fairly predictable pain points or metrics that are warning bells for heads of distribution. The first is simply number of deposits.

If you have a branch that has less than $15 million in deposits your costs are 10 times those of a larger branch. This means that 18% of branches in the U.S. today (or around 15,000 branches) are on the verge of collapse. On average these branches are losing around $50,000 to $75,000 a quarter. You can see a detailed analysis here from the team at Optirate.

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