Canadian towns could see a number of bank branch closures as customers shift away from entering local branches for everyday banking, said Bank of Nova Scotia CEO Brian Porter at an event Thursday.
"As all the banks look at their retail banking footprint in small town Canada, I think you will see some branch closures from a retail banking perspective," said Mr. Porter, who spoke at a Women in Wealth management conference in Toronto. "We are going through that as an institution now and there are other ways to serve customers."
A Scotiabank representative said it reviews its entire branch network on an ongoing basis in all Canadian markets and has seen branch closures – and openings – in both urban and rural areas.
One of the largest drivers of change is in the ability to access banking products through online and mobile channels.
Today, the average Scotiabank customer visits the branch once every two months and accesses the Internet banking platform twice a month, said Mr. Porter. Traffic is accelerating in the mobile banking application that clients now access an average 18 times a month. That amount of activity has the potential to increase, over the next four months, to an average of once a day.
"The increase of technology in the financial services industry is going to have a huge impact on the way Canadians do banking," said Mr. Porter, who has visited Silicon Valley twice in the last year and will return with the bank's board of directors in September. "We are out there to modernize the bank and it is not just at Scotiabank, it is happening everywhere. We also know that it is not just happening with the millennials. Many of us want to act like millennials and do our banking right from our pocket.
"The industry is going through a seminal shift in how we interact with our customers and our customers want us to be more relevant," he added.
The reality could be hard hitting for the residents of smaller towns, who continue to see the bank branch as a central place for social interaction. Branch closures could mean the amalgamation of two branches in a community but consideration will be taken in those areas to provide extra assistance to clients such as extended branch hours, Saturday banking and online- and mobile-bank training.
"We are spending a lot of time on customer segmentation and how we can effectively service our customers better but the customers have to evolve to the reality too," Mr. Porter said. "And that is going to be a difficult adjustment for some."
One of the key changes he wants to implement is a more time-efficient account-opening process – a procedure that currently takes about 42 minutes to complete at the branch. Mr. Porter wants to take that down to four minutes.
"Walking into any bank branch [to open an account] is a bit of an arduous process," said Mr. Porter, who complimented the account-opening process at digital online bank Tangerine, also a subsidiary of Scotiabank, as sleek and efficient.
Scotiabank is looking at a number of technology firms that can help it advance further in the financial services industry, including Palo Alto, Calif.-based Jumio Inc., which stands for "Just use my ID online." The application can be used for uploading and verifying driver's licence information from a mobile device.