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Email this10:53 pm
April 6, 2013
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Shareholder sentiment does indeed drive a lot of decisions. Theoretically, with CUs, the shareholders are the members. They want the CU to thrive, but they also want reasonable service.
The challenge is that what people want, the branches, is far from what they need to do their banking.
In CBC (Jan 31, 2024): Desjardins to cut a third of outlets, ATMs in Quebec, Ontario, Desjardins says their branches and ATM's are not used for over 96% of transactions:
At a time when financial transactions are increasingly online or by card, Desjardins has already closed several dozen service points and ATMs since 2022.
Desjardins says that by the end of last year, its 669 service counters accounted for just one per cent of transaction volume, while its 1,559 ATMs accounted for three per cent.
Recent KPMG survey Canadian banks must innovate their branch networks (June 4, 2024) had similar findings:
Most Canadians are rarely doing their daily banking in a bank or credit union branch, but they support keeping the current number of bank and credit union branches in their communities, posing a dilemma ….
…
… Nearly nine in 10 respondents (86 per cent) said they like and want the security of knowing their branch is there, even though they do most of their banking online or via mobile.
“What’s striking is how much value Canadians place on their bank branches, even though they rarely step inside them,” says Geoff Rush, Partner and National Industry Leader for financial services at KPMG in Canada. “This tells me that branches still play an important role in the future of Canadian financial services, but in order for them to serve a higher purpose for both consumers and banks, they need to take on a whole new look, feel and purpose for consumers – or else they’ll become costly real estate safety nets,” he adds.
Mr. Rush says if consumers continue to use branches for simple transactions and do more of their advanced financial transactions digitally, it could become increasingly difficult for banks and credit unions to justify having large branch networks. According to the most recent data from the World Bank, the average number of bank branches per 100,000 adults in Canada is 20.7, compared to a global average of 11.2.
Though their in-person branch visits are increasingly rare, respondents expressed a high degree of satisfaction with their financial institution, with 87 per cent saying they are happy with the service their branch provides. Respondents also expressed a high degree of loyalty to their financial institutions, with nearly three quarters (73 per cent) saying they would stay with their local bank or credit union even if their branch closed.
6:54 am
April 27, 2017
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Living in a rural location, I have 3 TD branches within 20 min drive and at least 8 TD branches within 30 min drive. Just visited one in May, but only because TD can’t open joint investment accounts remotely. Do not anticipate visiting them again. ATMs are useful though.
8:28 am
October 27, 2013
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This part of the KPMG report really struck me .....
Financial institutions need to find innovative ways to make the best use of their branches. Other jurisdictions around the world have experimented with a variety of approaches, including co-shared banking hubs, sales pods, roving branches and hybrid service models. Some of these approaches could serve as inspiration – or even be adapted for – the Canadian market where it makes sense.”
As per my underline, why in the world do we not have a 'banking mall' approach where CSR stations from any 3-10 financial institutions have kiosks in a single location? Why does my city of some 40-50k have ~10 brick and mortar locations for ~10 financial institutions?
We also need true Open Banking where consumers can hop from FI to FI from the convenience of their device in 10 minutes or less. Granted I would support an A&G fee for institution hopping to mitigate the silliness of institution hopping for no materially good reason, but open banking is long overdue in Canada. The foot dragging has been going on for far too long.
There are so many ways to eliminate huge amounts of brick and mortar locations and CSR stations. In smaller rural centres of less than 10k population, there is no reason for more than one brick and mortar building.
I suspect like in chequing, Canada and the USA is a decade behind most of the world in modernization of financial transactions. It is time to 'just do it'.
8:56 am
January 12, 2019
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.
FWIW . . .
Of all the FIs I deal with, only two have 'Brick & Mortar' options ... and I haven't darkened either of their doors, in Well over a year now. 
- Dean
" Live Long, Healthy ... And Prosper! "
9:54 am
January 25, 2024
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They should have 'mobile banker' driving to your place and helping you with something cannot be done on-line.
There will be No need for buildings, expensive lease, utility, etc.
'Mobile banker' would not be 'mobile ATM' - would not carry any money.
10:12 am
August 9, 2014
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CAD said
They should have 'mobile banker' driving to your place and helping you with something cannot be done on-line.
There will be No need for buildings, expensive lease, utility, etc.
'Mobile banker' would not be 'mobile ATM' - would not carry any money.
Thats a great idea, especially in a society with aging population that is sparsely populated.
Alternative is branch on wheels.
12:11 pm
November 18, 2017
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I'm still pissed that VanCity's ATMs now close from 10pm-7am, which means risking a parking ticket at many locations where meters go on until 10pm!
They've closed the outdoor ATM at Granville Island, and the one on Commercial and 1st is in a very scary area at night.
Are any other outfits restricting ATM hours?
RetirEd
1:24 pm
March 30, 2017
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With EFT, edeposit and going more cashless on all daily activities, ATMs are mostly unnecessary. The only time I still use an ATM is when the contractor I hire only accepts cash payment, and thats far and between these days.
1:36 pm
April 27, 2017
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ATMs are and will stay necessary for as long as cash is legal tender.
1:51 pm
October 27, 2013
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mordko said
ATMs are and will stay necessary for as long as cash is legal tender.
I agree they will be required as long as cash is used as legal tender and especially if CSR stations at all/most FIs eventually eliminate handling cash (the trend is underway).
However, there could be better consolidation of them under brand names we are familiar with, e.g. Cirrus, rather than either FI specific or grey/white market ones.
To respond to RetirEd though, I rarely ever use an ATM so I don't know if they are getting eliminated (or hours reduced) BUT what I would like to see is more of them located in convenience stores that are often open 24/7 anyway, and nothing stand alone where no one is around after hours. I would never go to a stand alone ATM in a deserted area.
A lot of convenience stores already have them but they seem to be FI specific or white/grey market ones.
4:48 pm
October 21, 2013
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Undoubtedly there is waning interest on the part of customers/members or FIs in having you come in to do simple transactions that can be done online The FI doesn't make any money off this, and you often don't need it anyway.
However, what the FIs all want is access to you, your mind, your money, and so on, and one of the best ways of getting that access and trust is person-to-person contact.
Therefore I would say their major challenges are to make online banking more reliable AND to find a way of meeting you in person that you find attractive. They all know it's much harder to say "no" to someone sitting with you than to hang up or log out.
Branches are simply a tool, and will be evaluated along with other tools to see how and if they can meet the goals.
9:48 pm
September 28, 2023
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Within the next generation the face of banking will change and consolidate greatly.
My predictions:
Branches: Most will close, other than a handful in large cities, and folks who desire face to face transactions (which will be limited to premium accounts or be a pay-per-visit model) will just be by appointment in an office somewhere... no tellers, vault, etc. It will still be all electronic transactions, just done by a bank employee for those who can't/don't want to go online on their own.
ATMs: The banks will cease to run their own ATM networks, but will cooperate with the other banks to consolidate their networks to serve all of them, much like the Exchange network does for the little banks. With no branch locations to host the ATM's, they will mainly be found at malls/power centres, transit hubs, and maybe some big box/grocery/gas chains might partner up.
The online innovators like Wealthsimple, EQ, etc. will keep pressuring the banks to compete, both on online convenience and to trim expenses from maintaining legacy branch/ATM operations.
5:36 am
November 8, 2018
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ABMs will go the way of payphones. Carrying wallet became "a boomer thing."
When you have everything on smartphone you don't have place for paper bills and coins in your pockets. Neither you have a need to use physical money for payments.
5:52 am
April 27, 2017
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At farm gate we accept any form of payment but most people prefer cash. Unfortunately they use a lot of coins too. Most customers are in their 30s.
5:57 am
March 30, 2017
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mordko said
At farm gate we accept any form of payment but most people prefer cash. Unfortunately they use a lot of coins too. Most customers are in their 30s.
I take this as a joke 🙂
6:49 am
November 8, 2018
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Didn't have to google for long to find this:
Generational shift is unfolding in digital payments, with Generation Z leading the way.
Findings from a PYMNTS study issued in February 2024 found an overwhelming preference for digital wallets among those younger adult consumers aged 18 to 26, a trend that sets them distinctly apart from older generations.
While 79 percent of Gen Z shoppers regularly embrace digital wallets for their transactions, the technology sees far less enthusiasm from baby boomers and seniors, with only about 26 percent adoption in those groups, according to PYMNTS, a website that provides data and insights on payment innovation.
That division in payment methods could influence the future of consumer spending, the study said.
7:06 am
April 27, 2017
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savemoresaveoften said
I take this as a joke 🙂
You can take it any way you like. I don’t expect you to know what’s happening at my farm. I did expect you to know basics about your own industry, like MER.
7:15 am
November 8, 2018
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mordko said
At farm gate we accept any form of payment but most people prefer cash. Unfortunately they use a lot of coins too.
Guilty as charged. Farmer's market and strawberry pickup at the farm were places where I offloaded otherwise useless coins.
I had a jar of them for a while, finally realized I am paying with credit/debit cards everywhere else.
This were before pandemics, since then I haven't used physical cash payment once.
Sorry, I thought farmers like physical cash payments and can use change. I tried to be considerate and didn't dump many coins at once.
When Canadian government allows keeping IDs on smartphone, I can ditch the wallet.
7:47 am
October 27, 2013
Online
It is taking far longer for digital payments to take hold at the rural level. Part of it is lack of POS access to broadband internet or even cellphone service, e.g. vendors not carrying POS terminals with them in the wheat fields. Until there is strong internet coverage blanketing at least the southern half of Canada, digital payments will lag and additionally, it is a convenient excuse NOT to change with the times.
Agricultural/rural communities in many other nations, as in Europe, do not have the same lack of access and hence digital payments have progressed far faster.
That all said, there is no reason why there cannot be physical FI branch consolidation, even in rural communities. A few well placed ATMs in villages and small towns is pretty much all that is needed for access to cash.
My old home town (municipality) of ~5000 souls still has 4 physical branches for 4 different FIs. A neighboring municipality of slightly larger size has 5 physical branches for 5 different FIs. None of them can reasonably be covering their costs for the mother ship.
8:25 am
January 25, 2024
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Alexandre said
When you have everything on smartphone you don't have place for paper bills and coins in your pockets. Neither you have a need to use physical money for payments.
Sorry, but I do NOT have 'everything' on my phone nor plan to have it. Phone is just that - phone. OK I have on it step counter (free money), very useful timer (in use while exercising), unbreakable app keeping all my id/password (yes, backed up in 3-4 places) and few other useful apps. But this is NO way of payment for me. NEVER!
Cash will exists as long as there is a 'gray' economy in this and other countries.
Please write your comments in the forum.