24 FEB 2020: There was a time when branches were at the heart of banking.
Earlier, customers had to be physically present at the branches for money transfers, but nowadays everyone prefers digital channels and mediums. For a bank to expand, a branch is no important because limitless options are available in the digital world.
With the introduction of UPI app, even the same denomination payments are moved easily. Also, apps like Paytm, PhonePe offer standalone payment options thus making branch visits redundant.
“There has been continuous disruption in the financial services sector mainly due to digitalisation. Banks have been introducing and spreading their presence across newer financial products,” said Choudhary of SBI. “Even though banks are fast adapting to digital ways, these new services require manpower to reach the deeper rural pockets.”
In 2019, nearly 74% of staff was at the branches and the remaining 26% were involved with other activities like sales and accounting. By 2025, it will fall to 55% at the branches, forecasts Boston Consulting Group.
“In the physical world, the more people you have the more you can reach out to them but, in the digital world, the multiple changes happen crazily. For example, in the physical world a sales guy would meet two customers in a day, in the digital world the same sales guy meets at least 7-8 customers in a day because the process is fast,” said Gupta of Kotak.