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March 2008
What will the role of branches be in 2015?

That question is relevant to decisions being made today about branch location, size, layout, useful life and financing (ownership vs. leasing). Having the wrong number of branches, the wrong design, the wrong locations and the wrong fit with other channels will adversely impact branch effectiveness and overall shareholder return.

Branches are not going to go away, customers won't let them. They are needed in the channel mix as experience with Internet only banks has proven. Online activity will grow, but customers will still come to branches to: get/dispose of cash, deposit checks, access safe deposit boxes, and engage in complex transactions with customer service reps.

The use of cash by customers has, is, and will continue to decline. Debit card, credit card, and ACH transactions will continue to gain market share. Checks written, while declining in number and market share aren't going away anytime soon. Some are being converted to ACH items at point of sale, and in back offices. The number of items being posted as checks to a checking account is declining. Remote deposit capture (RDC) is making it possible to image checks and transmit them from the branch to a central site. This in turn allows: great reductions in branch courier runs and keeping branches open later for greater convenience. Customers are scanning checks at ATMs.

Businesses are now using RDC to avoid trips to the bank. The service is well accepted and growing. Major banks have expressed to us an interest in extending the capability to retail customers. LCG has a patent pending process for using regular fax machines and scanners for RDC, opening up the consumer and lower end of the small business market. USAA is offering a flatbed scanner based RDC service to its members who have an insurance, deposit and credit relationship. Customers are being served at increasing distances because an occasional trip to a distant branch is not as inconvenient as daily trips.

What are some of the implications of these trends:

   1. Fewer customer visits to branches, but the visits that do occur will be more important.
   2. The effective branch footprint will grow, at least for some customer segments. Banks will compete for customers at
       greater distance, and have greater separation between branches.
   3. For the same investment in branches a bank can achieve greater market coverage.
   4. Fewer teller stations will be needed and more customer service space.
   5. Space will be needed for check scanners at teller stations, in back offices and self service locations.
   6. Branches will become smaller and at some locations there will be a need for more parking.
   7. Some city branches will provide some pickup services to compensate for fewer branches.
   8. Some branches may be subject to planned obsolescence over time.

We recommend incorporating these trends and implications in today's branching strategies and the models and tools used to make branch location and customer profitability decisions.



RESEARCH

March 2011
Small and Home Busines Check Deposit Practices 2010-11 Survey Results


October 2007
Small Business RDC Survey Results


ARTICLES



2012
Some Small and Home Businesses Willing to Pay Large Premium for RDC

Small and Home Businesses Are Not All the Same – An RDC View

2011
Lighthouse Consulting Group, LLC Granted Patent for CheckFaxRDC Application

2010 Survey of Small and Home Business Check Deposit Practices Now Closed

2010
LCG Sets Up LinkedIn Small and Home Business Depositor Group

CheckFaxRDC Compared to Other Remote Deposit Capture Solutions

2009
Looking Beyond the Averages When Offering RDC to Small and Home Businesses


2008
Oil Prices, Credit Crises - Alternate Routes to Remote Deposit Capture Growth


What will the role of branches be in 2015?

Remote Deposit Capture Creates Market Segmentation Opportunities


2006
Fax Machines - Check Scanners
Small Business Already Have


2005
Small Business - A Remote Capture Opportunity

Remote Check Image Capture -  Business Case Behind the Marketing Opportunity

2004
Check 21 a Marketing Opportunity!


2003
Check 21 Act Passes Congress - Opportunities and Concerns


When Will Banks Get On

Board for Check Imaging?


Customer Relationship Management - Why Expectations Go Unmet


Recover from a Disaster or Risk Customer Attrition


Internet Attacks May Be the Least of Your Worries!

Losing the Paper Chase


2002
Fewer Checks to Be Written and Even Fewer to Be Posted

Depositing Checks from Your Office
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