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Standard Bank branch cuts are long overdue

When last did you visit a bank branch? And when last did you go into one for anything other than stamped bank statements?

Every conceivable transaction or engagement with a bank can be done digitally, except for when you need to physically sign something. Even card collection is fast being removed from branches. At the upper end of the market, branches died with the proliferation of private banking.

The way we bank changed years ago.

This makes the decision by Standard Bank to close 91 branches and cut 1 200 jobs not at all surprising (the only surprises were that the bank announced it publicly and that it did so before elections in May).

In many ways, Standard Bank and Absa are behind the curve. Nedbank has been cutting branch space since 2014 and FNB is fast catching up with the “recalibration” of its branch network. Originally, Nedbank targeted a reduction in floor space of 30 000m2 by 2020. It surpassed that last year (32 971m2) and, given this “good progress”, has revised its target to 45 000m2 by the end of next year. The amount ‘saved’ so far equates to 14% of the “total branch floor space [it] occupied in 2014”. By comparison, FNB reduced its branch space by 9% year-on-year to December.

Overlaps and over-delivery

There are some obvious examples of overlap (or some questionable planning). In northern Johannesburg, Standard Bank has a branch at Bryanston Shopping Centre and another at Nicolway, 3km up the road. There’s a similar situation at Melrose Arch and Rosebank Mall, or at Dainfern Square and Fourways Crossing (each less than 4km from each other).

In outlying areas of the country, (very) small towns near each other often each have a branch of a given bank. Do Alexandria, Kenton-on-Sea and Port Alfred – all three 25km apart – really need a Standard Bank branch each? Does Sedgefield need an Absa branch when there’s one in Knynsa 25km away?

I’m not for a second suggesting that some of these branches are earmarked to close, but is there really a point to having these branches so close together?

And there is certainly no need for every shopping mall to have branches for all five banks.

Still important

Don’t get me wrong. Branches are still important, especially for certain segments of the population (think lower income customers, and the elderly). But the more innovative banks are already using their outlets to primarily drive digital onboarding. New-format FNB and Nedbank branches are almost wholly focused on getting customers up and running on their digital platforms. New competitors TymeBank, Bank Zero and Discovery Bank, will have no branches (technically Discovery will have just one, at its head office). Given that the last of these will be targeting the upper end of the market, physical distribution is not an important factor. TymeBank relies on its partnership with Pick n Pay to provide a footprint.

Standard Bank had 629 branches at the end of December. Remove 91 from that and you get to 530-odd. Expect all banks (excluding Capitec) to settle at the 500-branch mark soon. And then, perhaps 400. This will happen sooner than we think.

Branches won’t completely disappear overnight, but they will increasingly become a destination, not something solely for convenience.

Hilton Tarrant works at YFM. He can still be contacted at hilton@moneyweb.co.za.

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Well with ABSA bank taking 2 months and 6 days to update my residential address through their online method (including uploading FICA documents), all banks will have to seriously improve their online DIY offerings if they shut down branches.

Where will disgruntled clients drive their cars into when frustration levels reaching critical levels and there are no branches left and all call centres are based in Mumbai?

@Lance, true what you are saying, my colleague who lost her husband and wanted the payout to be deposited on her ABSA account, she ended up using Capitec because ABSA was taking too long in update the residential address. This was after she visited the branch twice.

On call centers being outside of SA I believe you and I think Standard bank and ABSA are using the same call center. The reason I am saying this , I seriously disliked the authentication questions from standard bank because I think they are doing data mining. They ask you to confirm the company that you own or registered , the dates, insurances that you have or clothing shops questions to confirm. I wanted to cancel standard bank and I opened ABSA account to test and when I called their call center, I was asked exactly the same choice of questions.

Too much of a coincidence!!

The worst thing of those questions is that you easily fail them! They have asked me questions that I have no clue about, about accounts I never had, CC’s I have not been a member of for years, etc. It is a nightmare.

KCD and Griet, those questions are based on your credit profiles listed at credit bureaus. Have you ever even looked at your credit report from one of the 4 main SA credit bureaus? Ever disputed glaring errors? The fake answers where nothing matches the reality you say “none of the above”. There is no data mining or nightmare.

So I suggest you get to know what’s showing in your own credit profiles, all of the 4 which can be gotten free once a year.

No, I don’t work in any connected industry, just figured it out on my own, because I keep tabs on my credit reports.

I have been forever failing those stupid questioj

Supersunbird, I actually did check the credit bureaus for fear of identity theft, after this disconcerting experience, but no, nothing against my name. Check social media and you will find I am not the only one baffled by the questions and unable to answer them “correctly”.

Griet, if none of the answers are correct as per information listed on your credit profiles you just say “none of them”.

What do you men nothing against your name? The credit report will have info as to you, what contracts you have, what debt you have, CCs you have been a member of (even if deactivated) and similar. Nothing to do with bad listings.

And those social media people also have not familiarized themselves with the info shown on their 4 different credit profiles.

OK, maybe I did not express myself well. As I am responsible for all admin for both my husband and I, I know my own affairs well. However, I do not have intimate knowledge or recollection of the finer details of a CC I am no longer a member of, and as a partner in a business where I was not involved in the day to day running. So no, I don’t remember if anyone had a specific cellphone contract 7 years ago, or what accounts were held and at what banks, etc. Sold, disbanded, everything above board and nothing outstanding. I simply don’t have that kind of information and the questions are irrelevant. The result of this is that I can no longer, for instance, call Standard Bank’s call centre regarding my credit card, as I am apparently an imposter. If ABSA has now contracted to the same idiotic system, I will soon have no access there as well, a client since the Volkskas days 40 years ago. So yes, we do need branches to show up at, automated systems are not flawless and the poor bewildered call centre agents can only react according to the rubbish the computer spews at them.

The call centre interrogation is indeed frustrating. The irony is customers have to jump through demanding hoops and hurdles, while it appears Debit Order initiators and their bankers simply help themselves to the customers’ money without restriction – R99 at a time! To add insult to injury, the customer is charged to reverse said unauthorised Debit Order after having to go though the agonising call centre interrogation yet again. Aaaaggghh!!

I worked as a branch manager at FNB but resigned after 26 years. Main reasons were they were cutting staff to the bone and forcing us to migrate clients to digital channels. So if a client wants to deposit at a teller you have to basically stop them and tell them to use an ATM. They make it part of yr performance contract and every client that gets through to a teller is marked down against you but they tell you not to force them but then why mark you down. Most clients cannot use laptops, atms, smartphones, apps etc so all you do the whole day is help people on these devices bearing in mind this is not America its a 3rd world country. Now they centralise functions but those depts are dysfunctional. So the client screams at the branch manager. The upper echelons want to hear nothing. You must block all the client complaints. Those coming up with the ideas have never worked in a branch. So my take on this is that the clients are leaving and moving to Capitec. They still have branches where they can help these clients. So now they have to cut staff because clients are moving. If you chase them out onto digital you have a big chance of losing them. Also yr sales come from walk in clients. No clients in the bank, no sales. Now the staff have targets and if they have no customers they must make a plan to phone them for sales. Does this make sense? So FNB must go on their digital drive but they are driving the clients to Capitec. Relationships build banks. In South Africa, the digital bank is for the few that can afford the luxury and are literate. It does not work. There must be a balance. Not the one replacing the other. Now the CEO of Fnb says the load shedding was affecting ckients ability to use these digital channels. So they come into a branch and now there is no staff to help them, as a lot if branches have generators. Well, hello, this is not America. So i decided i am not listening to screaming clients and verbal abuse while they sit in their ivory towers. You have to work there to see and feel the toxic environment.

@Willowy….you couldnt have said it better !!!

You’ve excluded SME’s entirely in your analysis as well as how banks in general will be able to actually retain customers that their adspend pays for if there is no presence on the ground. You will also find that the biggest cost in a retail bank is the bloated head office structure – most branches tend to hold their own in terms of income with the notable exception of the areas that have become dodgy like Yeoville etc.

FNB is actively discouraging branch visit..card delivery is free but card collection at branch is R200.

Wonder how FNB delivers to people who are always moving around? After hours home delivery? I doubt it.

Read what i wrote about FNB. I was an ex branch manager that resigned 2 years ago because of them forcing us the move clients out if the bank. Their strategy is to have no clients in the branch and only a few staff with digital branches.

We use branches everyday. We collect change and thank heavens for cash we are able to trade. No electricity- no cash- no trade.

Why do so many people seem to think digital banking is new and cutting-edge? I had an account with 20Twenty (RIP) from 2001 until Standard Chartered killed it. It was amazing. They got the service offering perfect and the online experience was so good that the notion of a branch was an absurdity. To this day, their online platform is the best of any bank I’ve ever used. I’m sure many others who remember 20Twenty are also bewildered at the inability of mainstream banks to match that customer experience a generation later.

Nowadays as a Standard Bank customer, the only reason I go into Standard Bank’s branches or -horror of horrors- phone their call centre is because there is so much stuff that their feeble and unreliable online banking platform can’t do.

Standard Bank is run by people who don’t understand digital banking because they’ve never experienced it done properly and they don’t have the headspace to innovate. If their branches were all bulldozed overnight, the bank would collapse, and that’s the problem they can’t figure out.

I am sick of STandard bank just upping charges and inventing new charges.I suddenly started getting a card fee of R25 per month then my main account just goes up by R50 per month then the card fee increases by R5 and no contact made or anythingto inform you. I got a CAPITEC account and pay R5 per month compared to over R200 with STD bank but i cant get a CAPITEC creditcard.

@Rob Handfield Jones

Fact: Banking is in the SERVICE industry

Business 101: You can…NOT….run a service sector business without physical interaction

Lets use a simple analogy – imagine hotels without anyone at the front desk ?

You will always need BOTH – online side, AND the human interaction to cater for everything else besides the simple transaction of money

When are businesses going to get this ??????

@Hilton…….Are you serious ?

Hello, have you read the comments below to your own article ??

One can only wonder if this wasn’t a bit of paid for PR to punt this illogical bank agenda

In this day and age of the mantra ‘Customer Service Customer Service’, the banks are now instead CUTTING the last personal lifeline for customers ??

Banking can often be a complicated issue, especially as technology increases and the likelihood of things going wrong, as they so often do

So, instead of just being able to walk into a branch and at least get SOME chance for assistance, customers are now being fobbed off to low level under qualified call center fly by nights to deal with this !

For banks who year in and out make BILLIONS in profit annually,instead of INVESTING in expanding and training top quality staff to IMPROVE on customer service, its moving the other way ….!

This is stupefying !

I would like to see a breakdown of customer age profiles per bank and how this has changed. I wonder if the big 4 are overexposed to the “grey-tops”, which are either retiring or emigrating. Are they reliant on an ever decreasing demographic?

I’ve just had the trial of dealing with Nedbank’s call Centre as the local branch is no longer empowered to do what I want. I dealt with two imbeciles who would not carry out a simple request because they’d been told to cross sell me something. The individuals understood nothing about my personal circumstances and the one tried to sell me a savings product on the grounds it would save me tax without knowing my tax position. Heaven help us once the major banks finish emasculating their branch networks. If I wanted branch-less banking I have lots of choices – I don’t but my choices are being reduced. What a shambles – I wonder how long it’ll be before some bright MBA re-invents the concept of a branch manager who actually understands the clients’ needs???

If you dare go into a bank, you tell the ‘lady’ in front what you are there for. She can hardly speak English. Then you get a number and get called to the wrong window. Then you start all over again.
Before you just walked to the correct counter and got the job done.

With the problem of the call centres always experiencing high call volumes it is just going to be worse and how are you going to deposit cash on line . They dont know what they are doing . Lets hope new banks will rise to the occasion and give customers the service that they are taking away. Sometimes you have as a way of business a lot of cash to deposit.

There was a time when a bank branch with personnel of 15 handled all banking activities. From home loans to investments. Home loans granted in two days. The busiest time month end when Iscor workers stood a block down to withdraw their pay. Cleared away by 9 am.
Any query sorted if not immediate within a day. Competent managers and personnel who understood every banking activity. And then decentralisation happened. Personnel now do not have a clue of services offered and client service is non existent.

The old days you describe sounds like decentralisation, and now centralisation has happened and that’s why there are issues. Just saying how you wrote it doesn’t make sense to me.

Lol, makes no sense to me as well, should be centralisation. Thanks.

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