Doubling Down on ATMs: Return from the Death
by Robert McGarvey
Just when you thought ATMs had to be going down for the count—and, honestly, who didn’t think that as the pandemic took hold?—the rumbling is loud that ATMs are emerging as a low cost branch replacement option.
Understand, too, that closure of bank branches is on a fast track. Pymnts forecasts that some 20,000 bank branches will close by year-end, mainly because many of us have shifted our banking to digital channels and correspondingly have cut back on branch visits. Personally, I cannot remember the last time I was in a branch. Recently, when I walked by the branch I had very occasionally visited, it had plywood on the windows and doors and a notice that it was closed.
Michael Perito, regional bank analyst for Keefe Bruyette & Woods, a New York investment bank, is on record saying that there needs to be closures of perhaps 20 to 30% of branches—“and that’s a conservative estimate.”
Sure, credit unions are unlikely to close as many branches as banks will because the industry is not over-branched the way money center banks in particular are. There will, however, be closures of credit union branches in neighborhoods where they are not demonstrating there is a need. And other branches will close as institutions “right size” branches from yesteryear’s 3,000+ sf to under 1,000sf (and often just a single teller line, down from the four to eight of yesteryear).
Call this a big branch rethink where what will emerge is the branch of tomorrow. Few believe credit union branches are disappearing. But many think that tomorrow’s branches will make much more use of self-service tools and technologies.