Nolan Perspectives
The transformation of customer needs has largely outpaced the systems banks have in place to support them. Those customer shifts have been driven by innovations in connectivity, social media, and devices such as smartphones and tablets.
For banks, the imperative of sustaining new business growth in both the retail and commercial sectors has more variables to manage than ever before.
A recent BAI report indicates that the future in branching favors banks with a dense footprint and large market share. There are also studies suggesting that branch profitability is more strategic when achieving density in markets with a growing population and increasing household income.
Efficient, effective, and productive are terms that are often used to define banks that manage their customer experience at the right cost. Reactions vary when those terms are mentioned in regard to high-performing banks or in describing a performance improvement effort.
The downward trend in the number of U.S. banks—now down to 6,805—has continued in 2014. There has been a steady decline over the past 11 years from a total of 8,108 in 2003.
“JPMorgan Chase plans 8,000 layoffs”
“Bank of America announces another round of layoffs”
“Barclays to cut up to 12,000 jobs”
“Wells Fargo announces 6,400 layoffs”
Retail counter traffic in banks is already in steep decline. Changing customer behaviors, including the increasing use of mobile banking, electronic payments, direct deposit and ATMs are altering the way banking is done in the today’s world.
Nolan’s Bank Performance Study provides insight into the business of banking and changes over recent years that can have potential impacts on the future. We look for significant upward and downward trends in Key Ratios at the line-of-business or functional level.
The Nolan Company’s Bank Performance Study analyzes the business of banking, how things have changed over the past years and what changes may be looming on the horizon. As the results of the latest study are compiled, some compelling trends are emerging from the raw numbers.
