The impact of 'branchless banking' on building society branch networks

The authors examine the impact of the remote delivery of financial services on the branch network of British building societies. The current phase of branch-network rationalisation in the financial sector in Europe and North America is argued in the academic literature to be the inevitable consequen ce of the growth of electronic and telemediated forms of delivery of financ ial services. In the British building society sector, despite some evidence of branch closure as the use of the Internet and telephone call centres in the delivery of financial services has grown, the picture that emerges is of a dynamic branch network that is responding to changing customer demands and new technological possibilities. Face-to-face advice and discussions b etween customers and trained 'experts' remain an important part of the mort gage transaction. In the savings market, where products have become more co mmodified, telephone call centres and, more recently, the Internet have bec ome more prominent, but institutions still rely heavily on the branch netwo rk to deliver services. The authors suggest that, although there have been changes in the relative importance of different distribution channels as so urces of business in the financial sector, it is wrong to view these change s in terms of a simple branch-versus-direct dichotomy. A more complex pictu re is presented, with most institutions adopting a multichannel approach to the delivery of financial services, and electronic forms of delivery of fi nancial services being developed as an additional delivery channel alongsid e the branch.