Money on wheels: the hub and spoke approach

By : Carol Hamilton

August 06, 2014 02:30 PM

Bank branches are closing all over–almost 1,500 were shut last year in the US. But this is not always a bad thing; in fact it shows the extent to which banks are responding to changing customer expectations.


When it comes to bank branches and the way institutions react to consumer needs, one size does not fit all.


The traditional catch-all branch is still the key to service-your branch hub. But a bank needs fewer of these than it used to. Just as the arrival of the ATM diminished the need for brick-and-mortar branches, new technology is lessening demand further still. With mobile, telephone and online banking, the fact is that consumers don’t want to use their branch as much.


Increasingly, we see greater rationalization of branches into what can be described as the hub-and-spoke model. The hub is just that–the core of your retail banking operations. It’s the main branch that serves everyone and offers everything you have.


What’s increasing is the number of spokes–smaller branches, part-time branches or even shared branches.


Banks are working to provide services in more convenient locations, for example, Britain’s Barclays bank is set to close hundreds of main branches and replace them with much smaller operations at outlets of Walmart-owned supermarket, ASDA. And Barclays is not alone–we are seeing banking services appear in grocery stores all around the world.


A number of US banks and Credit Unions have embraced remote video technology making it possible to offer traditional teller services through the ATM. With a video call customers can talk direct to a person, which not only adds the human touch but also gives additional service options. And in fact, because the video agents can be centrally located, the bank can offer longer opening hours.


The spokes are not always static, though. Another example from the UK, the Royal Bank of Scotland has invested in a new fleet of mobile bank branches that literally takes banking into communities. It has 19 of these high-tech vans on the road at any one time, visiting 357 communities and covering 7,000 miles each week around the country.


Technology means smaller, part-time and mobile branches can offer almost exactly the same services as the large traditional sites, which provides more convenience and can only be a good thing for the customer.

Carol Hamilton

Branch Sales Specialist

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Carol is a Branch Sales Specialist sales of NCR’s branch solutions for the UK and Republic of Ireland. She has 10 years’ experience in financial services within NCR and also with Tesco Bank in the UK. She is based in Dundee, Scotland.