Can the Bank Branch Be Saved? Probably Not

Book: Bank 3.0: Why Banking Is No Longer Somewhere You Go But Something You Do Author: Brett King ISBN: 978-1-118-58963-2 Chapter 3: Can the Branch Be Saved?

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Brett King opens this chapter with a simple question. When was the last time you actually walked into a bank branch? Not because you wanted to. Because you had to.

For most of us, the answer is either “I can’t remember” or “it was painful.” And that right there is the whole argument of Chapter 3 in a nutshell.

The Branch Is Dying, and the Numbers Prove It

King doesn’t just make a gut feeling argument here. He brings receipts.

Bank of America closed up to 600 branches in 2011. HSBC sold off 195 branches. JPMorgan Chase originally planned to open 2,000 new branches, then walked that back to 1,100, then 900. In the UK, one branch closed every single day since 1990. That is over 7,000 branches gone in 20 years. Nearly half the branches that existed in 1990.

Australia saw a seven percent drop from peak to 2011. And this was before the real mobile banking boom hit.

Here is what stuck with me. A Standard Chartered survey found 75 percent of customers said the internet was their first choice for banking. Only 12 percent picked the branch. And 32 percent of US customers who switched banks in 2011 did it specifically to get mobile banking access. People are literally leaving their bank to get a better app. Nobody is switching banks because the branch has nicer chairs.

“Always Banking, Never at a Bank”

King actually trademarked this phrase, which is kind of funny but also kind of perfect.

His core point is simple. Banking is about utility. We need banks to keep our money safe, move it around, help us buy homes and cars. We don’t buy a mortgage. We buy a home. The mortgage is just the tool that makes it happen. Same with credit cards. We don’t want a credit card. We want to travel and shop without carrying cash.

For centuries, the only way to access this utility was through a branch. You had to physically go there. But now? You can do almost everything from your phone at midnight in your pajamas. The branch went from being the only way to get banking done to being the slowest, least convenient way.

And that shift changes everything. When banking becomes pure utility, the branch becomes the channel that slows things down. It adds friction instead of removing it.

But What About the Apple Store Model?

King has a great section about how banks got excited about copying the Apple Store concept. Citibank opened a fancy high-tech branch in Union Square, designed by the same firm that did the Apple Stores. Bankers thought: if we just make the space cooler, customers will come flooding back.

Spoiler: they didn’t.

Here is the thing King points out that I think is brilliant. Even Apple’s own data shows that once someone buys an iPhone or iPad in-store, they almost never come back to the store to buy apps. 70 to 75 percent of lifetime revenue from Apple customers comes from online sales. The store gets you in the door once, maybe. After that, the relationship lives digitally.

And bank products are way less exciting than iPhones. Nobody is lining up to touch and feel a savings account. Less than one percent of Apple’s revenue comes from their Genius Bar advisory services. So the idea that banks can justify branches through “advisory capability” doesn’t hold up when even Apple can barely make that work.

The Psychology Problem

This is where it gets interesting. King acknowledges something important. Even though customers rarely visit branches, many of them still want to know a branch exists. It is a psychological comfort thing. Like knowing the fire extinguisher is under the sink. You never use it, but you feel better knowing it is there.

This goes back to the Great Depression era, when people associated more branches with stability. If a bank has lots of physical locations, it must be solid and safe. That feeling still lingers.

But here is the catch. The customers who are most profitable for banks (wealthy, time-poor professionals) are the least likely to visit a branch. They want fast digital service. Meanwhile, the customers who most want branches tend to be less profitable and have older habits. Banks are stuck paying for expensive real estate to serve a shrinking group of lower-value customers.

Some Branch Ideas That Actually Work

King isn’t saying burn all branches to the ground. He talks about several models that make more sense than the traditional setup.

Flagship brand stores are about brand presence, not transactions. Think Louis Vuitton, not a teller window. SNS Bank in the Netherlands removed cash handling from branches entirely. Less than two percent of their transactions involved cash anyway. The result? Lower costs and better customer satisfaction.

Bank-shops in malls work because they go where people already are, with flexible hours. No more leaving work early to get to the bank before it closes at 4pm.

Pop-up branches are temporary setups at car dealerships, universities, trade shows. Purpose-built for specific products and audiences.

The “third place” is my favorite concept. It is basically just an advisor with an iPad and a couple of comfortable chairs. Maybe a coffee machine. No tellers, no counters, no bulletproof glass. Just a place to sit and talk. Texas University Federal Credit Union did this and saved $150,000 per location per year. Customers said service actually improved.

Automated and self-service branches use video conferencing and machines to handle basic transactions. ABN Amro tried “teleportal branches” on university campuses where one teller could support multiple locations via video.

The Umpqua Bank Story

One of the most interesting case studies in this chapter is Umpqua Bank. In 1994, it had four branches and $150 million in assets. By the time King wrote the book, it had over 170 stores and $12 billion in assets.

But here is what matters. Umpqua did not succeed because of fancy furniture. They brought in the Ritz-Carlton customer service team to train their staff. They changed their entire culture. They measured success not just by products sold, but by visit frequency, service resolution times, and customer satisfaction. Staff were empowered to actually solve problems instead of following a rigid script.

King then compares this to UBank in Australia, which grew to $10 billion in assets in under four years with zero branches. So clearly branches are not the secret sauce. Culture and service are.

My Take

This chapter hit hard for me because I have lived this shift. I genuinely cannot remember the last time I walked into a bank branch by choice. Every time I have gone, it was because some process required a physical signature or a notarized document. And every single time, I left thinking “that could have been an email.”

King’s point about utility is the most important takeaway. Banking is a tool, not a destination. The moment you frame it that way, the argument for keeping thousands of expensive branches falls apart.

The psychology angle is real though. There is comfort in knowing a physical location exists. But comfort is not the same as usage. And you cannot justify billions in real estate costs based on vibes.

What is wild is that King wrote this in 2012, and most of his predictions turned out to be conservative. Branch closures have accelerated way beyond what he expected. COVID alone wiped out years of “gradual transition” planning.

The banks that get this right will be the ones that stop asking “how do we get customers back into branches?” and start asking “how do we serve customers wherever they already are?” That is the Bank 3.0 mindset. And honestly, it is just common sense.

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