When concluding did you visit a bank branch? A few months dorsum? Longer? And were it non for that infernal requirement to accept stamped bank statements every fourth dimension you lot try and do something/anything, yous likely wouldn't have visited a branch in years….

Thing is, retail banks take go exceedingly good at channeling transactions and processes to digital channels. FNB has led the accuse locally, and has arguably been the nigh successful of the big four at the shift to digital.

Almost every possible transaction used to require some sort of manual process performed past a physical person at a bricks-and-mortar location. Now? Home loans, personal loans, queries, replacement cards, deposits, foreign exchange are all possible without setting foot in a depository financial institution. Each of these interactions are becoming more and more efficient and automated (I can contrast my experience of applying for and obtaining ii home loans 18 months autonomously with FNB). And clients are loftier incentivised through both the carrot of rewards programmes and the stick of punitive fees to non ever visit a branch.

Which made the (negative) outcry effectually contempo news that FNB would be trimming its co-operative footprint all the more surprising. Certain, those affected won't be able to look at this dispassionately, only it should exist obvious for all to see that the cutting dorsum of irrelevant branches (and costs) is positive. Would staff, shareholders and clients appreciate a banking company that isn't looking to shift transactions and investment to more efficient channels?

In its comments to the media following the news, FNB fabricated it articulate that full-service branches are non affected. This is bank jargon for what are finer large, destination branches. Co-operative cyberbanking is shifting (has shifted) from a model of needing to be as shut to your client as possible to 1 where customers need to visit a branch that infrequently that they'll be content to deliberately travel to i. The suburban branches with a handful of tellers and which offer fifty-fifty fewer services are fast disappearing.

Branches are (rather evidently) very expensive. For one, prime locations don't come cheap. And those dozens of staff certainly aren't either. FNB (and other banks) accept done well at consolidating back up staff in the form of "shared personal bankers" bachelor to their higher-income clients. These bankers, required in transactions or queries that necessitate some level of human interest, typically take care of anything and everything (card replacements, forex, home loans, queries), each for dozens (hundreds?) of clients. Information technology's a call center on steroids.

In its starting time-half results to 31 Dec 2015, FNB said that the volume of manual transactions increased 1% while electronic transactions were upwards 13% (to contain 88% of all transactions). The growth across the bank's electronic platforms are telling. Volumes on internet banking (the nigh mature platform) are up 7%, those on mobile (USSD) are 19% college, the app has seen transaction growth of 60% and deposits at its cash-accepting ATMs are up 20%.

FNB CEO Jacques Celliers told Moneyweb in early March: "We now procedure more cash deposits outside branches at ATMs, than within branches." From a volume bespeak-of-view, that's no surprise. And ADTs (automated-deposit taking ATMs) will surely surpass branches in terms of value as well at some signal in the next twelve months, possibly as soon as six.

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Against this backdrop, is information technology any surprise that the banking concern is cutting its non-prime branches?

In a Bloomberg study, a trader at Thebe Stockbroking was quoted as saying "No 1 always thought that FNB would have to resort to these measures".

Quite why this is such a massive surprise to many (this trader included) is a mystery.

Former FNB dominate turned venture capitalist Michael Jordaan was rather prescient in a series of January tweets…

Y'all can be admittedly certain that there are multiple teams and projects ongoing in our banks wholly focused on removing layers of complexity and costs in concrete co-operative networks. FNB's Lee-Anne van Zyl has all but confirmed this, saying in a argument that "We are now applying measures to further improve the performance of the bank's branch network. The process will commence in early February and run through to May 2016." While just 25 outlets will be affected in this electric current round of "optimisation", it would exist tough to bet against more changes afterwards this year, following this review.

This is happening everywhere globally, and while the "struggling economy" and "drought" provide useful cover, they don't even tell half the story.

Shortly, nosotros won't need tellers (In my lifetime I've already seen the physical space occupied by tellers change from well-nigh all of the branch to just two counters. I wonder what my gran – a former bank director – thinks when she walks into a co-operative these days…).

Absolutely key for the big four banks in the next five years is how they manage the 'rationalisation' of their physical footprints. Expect an acceleration of negative growth in branch numbers. Simply put: the big four banks will have fewer branches at the terminate of 2016 than they exercise now. It'due south hard to run into annihilation else.

* Hilton Tarrant works at immedia. He tin still exist contacted at hilton@moneyweb.co.za.