The news that Bank of America would likely end up with fewer branches, perhaps, about 10 percent fewer, over the next several years ignited a firestorm of media reports. The collective impression is that bank branches are being wound down somehow. We've noted that such a conclusion would be premature and we were heartened to see report from Celent on Branch Automation Vendors, which puts the news in context. 

It's true that bank branches face a very challenging time. Investment in branches, once seen as a priority, is now constrained. And the golden era of bank-branch growth--hard to believe now that 10,000 full service branches came online in the last five years--has come to a crossroads. Web-based channels and mobile channels continue to grow, and branches are fulfilling a smaller percentage of transactions. 

But even if you buy the idea that this is now a legacy distribution network, you still have to manage the decline. Shuttering branches willy-nillly is not the best route. Still, there are trade-offs involved: Given scarce resources do you focus on self-service channels or branch channels? The answer for most banks is that you have to do both.  

Web-based and mobile service are on a growth trajectory. So what to do with branches? There are lots of vendors out there with lots of ideas, led by Fiserv, Hardland, S1, Argo, Unisys, FIS TouchPoint and others. Well, the idea that branches should become less transactional and more sales oriented is not new. But how to do that?  

One approach, noted by Celent, is to blend the transaction and sales functions in branches. You've got to have your tellers equipped with the technology and know-how to do more than process deposits. They've got to be able to cross-sell too. You're better off with fewer tellers who are each much more versatile. In this light, all the innovations, from branch redesign to the rise of video-conferencing, make that much more sense. 

Anything that can streamline the transaction process will help the "teller" with sales and consulting services, and that's a good thing. As of now, Celent finds that sales and service applications are driving purchases more than teller systems. We'll see what the branch looks like in five years. - Jim