The declining use of cash in our society could be the best thing to happen to branch banking.
The old-style bank branch sent a subtle message to customers: You need us more than we need you. Lineups were slow, the spaces were cramped and the service was minimal at best. The declining use of cash has broken this power dynamic.
People don’t need to visit the branch as much as they used to, which means there are fewer opportunities for banks to sell the investments, credit lines and credit cards that sustain their revenues and profits. The Royal Bank of Canada branch that opened beside the Place d’Orleans Mall in suburban Ottawa last May is a shining example of how banks are trying to keep branch banking alive in an increasingly cashless world.
Walk in through the huge front sliding-glass doors and you’ll find a bright, airy design that has dispensed with the traditional counter of tellers all in row. Instead, there are four workstations where client advisers (that’s RBC’s term for tellers) and clients can stand side by side and confer around a shared computer screen.
“I can bring up your profile and you and I can both look at it together,” said Shelly Dunn, assistant manager at the branch. “It allows the client to be much more involved in the conversation.”
For semi-private chats, there are “banquettes” where staff and clients can sit restaurant style. For more serious business, one wall of the branch is lined with glass-sided offices where clients can meet with RBC staff.
Cash use in Canada has declined by about 30 per cent since 2008, according to Payments Canada, as people adapted to making payments with the tap of a debit card, remote cheque-cashing using smartphones or tablets and e-transfers that permit money to be sent via e-mail or text instead of cheque.
Less cash-handling frees up client advisers to take on a variety of new roles. They’re tutors, helping clients master new technology such as remote cheque-cashing; they’re trouble-shooters, helping clients fix problems with their accounts. Ms. Dunn said that if the Place d’Orleans branch gets overcrowded, a staff member will come up to clients in the queue and use a tablet to try to serve them more quickly.
The new branch banking also means tellers are sellers. A lot of attention has been paid in the past couple of years to frontline bank staff being pressured to sell products to clients such as investments, credit cards or deluxe chequing accounts. You might come to the branch to deposit a cheque and be offered a premium travel rewards credit card with an annual fee.
“What we want to do is advise and educate clients about the options that are available to them,” said Louise Summers, RBC’s regional vice-president from the Ottawa central region. This typically means making arrangements for clients to meet the branch’s specialists in mortgages, investments or small business.
The latest numbers from the Canadian Bankers Association show a gradual decline in this country’s bank branch network to 5,907 in 2017 from 6,348 in 2014, a drop of almost 7 per cent. Considering the sharper move away from cash transactions, that’s a modest slide.
“With transactional banking mainly done electronically, the role of the branch is changing to that of an applications and advice centre," said David McVay, a banking industry consultant at McVay and Associates. “People still prefer to do things like opening an account or getting a loan or mortgage or talking about their investments face to face as opposed to online.”
ATMs may be more vulnerable to the declining use of cash than branches, Mr. McVay said. If you can pay for a purchase with tap technology and deposit cheques by taking a picture of them with your smartphone or tablet, you don’t need to visit a bank machine.
Mr. McVay said ATMs are still an integral part of the transactional system, but banks are becoming more focused on putting them in high-traffic areas. For example, RBC now has more than 500 ATMs located in Petro-Canada stations.
Could the declining use of cash result in a cashless bank branch some day? It’s already happening in a few locations internationally and in Canada, including an RBC outlet near the University of Ottawa. But cash is far from dead, and life in bank branches reflects that.
Ms. Dunn said businesses still regularly deposit cash in the Place d’Orleans RBC branch, and so do everyday savers. “We still have many clients who like to roll coins and bring them in and then put the money in their vacation fund.”
This is part of a series that looks at Canada’s movement toward a cashless society.