In the debate over the role and future of bank branches, ultimately the only opinion that counts is the consumer’s. Customers make decisions on primary banking relationship based on assumed need for multiple network point convenience, even though they may patronise one point most often.

In emerging markets, customers who are more predisposed to digital channels often take into account how to select a bank based on the perception of being able to go to a branch. Data shows that while consumers use physical branches less often than they once did, they still use them quite a bit, even as they have adopted digital banking. For instance, at JPMorgan Chase & Co US, about 21 million different customers will visit a JPMorgan branch each year, while the bank has more than 50 million digital users.

While physical branches remain relevant channels in the offline online mix, these are remoulded for a digitised future in cash-light economies and for technologies having a massive impact on how branch staff interact with customers. Banks imagine their branches with less teller, more self-service options and as advisory centres.

Yet the shift towards digital and the impact on branch networks varies by markets. In Malaysia, banks are cutting down the number of branches as they automate customer servicing and acquisition through artificial intelligence (AI) and chatbots, while Taiwan banks, which also launched chatbots and seemed farther down the line, are keeping their branches.

In Hong Kong and the United Arab Emirates, the trend has seen fewer number of branches, smaller and more efficient formats, and larger areas for customer self-service. In China and Thailand, banks believe that the fixed costs in branches help avoid becoming economically unsustainable in the wake of fintech competition.

However, despite branch declines across mature and increasingly emerging markets, banks also benefit from strong physical ‘franchise’ footp...

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