Half of bank branches ‘will close by 2020’

Half of bank branches in developed countries will be “obsolete” by the end of the decade due to economic, political and technological trends, according to property consultancy Jones Lang LaSalle.

A report by the firm suggests that lenders will close outlets in the West and instead expand their branch networks in emerging markets such as Brazil, China and India.

James Brown, head of retail research for Europe, the Middle East and Africa at Jones Lang LaSalle, said: “Technology – and the increasing influence of online and mobile banking in particular – are redefining the need for physical retail banking space.

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“Whilst there is growth in emerging and frontier markets, retail branch networks in developed economies are going through a period of adjustment.”

The report predicted that banks would introduce “hi-tech experimental branches, with 24-hour access to call centre staff through video conferencing”.

“Expect the hub and spoke model to gain prominence, whereby premium flagship branches in big cities cater for the more sophisticated products and services, and smaller satellite branches give access to basic banking services,” the report suggested.

“America and Europe in particular are over-banked and are witness to a rationalisation of branch numbers and a reduction in branch footprints. However, banks have too much invested in their branch networks to engage upon a radical disposal programme. Lease expiries will be the catalyst for change.”