{ "docId": "019dd923-5ddf-7308-8fc9-ffb8d3e6d329", "docSlug": "c7dec8e9685f2ea1", "documentTitle": "Do banks still need branch networks? REPORT Optimization opportunities with a focus on the GCC region", "authorId": "RolandBerger", "authorName": "Roland Berger", "documentKindSlug": "consulting-deck", "documentKindLabel": "Consulting deck", "sourceTypeSlug": "strategy_consulting", "sourceTypeLabel": "Strategy consulting", "presentationDate": null, "orientation": "portrait", "aspectRatio": 0.707, "pageNumber": 12, "pageCount": 13, "prevPage": 11, "nextPage": 13, "slideType": "key_takeaways", "function": "summarize", "density": "overcrowded", "nDataPoints": 2, "notes": "The slide provides a concluding synthesis of the report's findings regarding branch network strategy.", "elementsJson": [ "paragraph" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-5ddf-7308-8fc9-ffb8d3e6d329/12", "deckHref": "/decks/019dd923-5ddf-7308-8fc9-ffb8d3e6d329", "deckJsonHref": "/decks/019dd923-5ddf-7308-8fc9-ffb8d3e6d329.json", "deckAnchorHref": "/decks/019dd923-5ddf-7308-8fc9-ffb8d3e6d329#slide-12", "components": [ { "bbox": null, "kind": "callout", "text": "Banks across the GCC countries have the potential to further streamline their footprints by more than 623 branches, generating recurrent annual savings of up to USD 3.1 bn.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd951-e590-72ba-a107-210999863bb1", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "annual savings: USD 3.1 bn", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd951-e590-72ba-a107-2722b1e19037", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.6, "x": 0.21, "y": 0.3 }, "kind": "paragraph", "text": "The transformed role of branches will be geared toward fostering relationships, where customers are advised, and where value-adding activities are provided. In this context, digital channels will handle the majority of straightforward transactional products, while branches will be dedicated to the servicing of more complex and comprehensive needs, such as bancassurance and investment products. Branches will also handle certain complex transactions that are hard to fully execute digitally, such as the structuring and sale of mortgages. However, as a clear cut between needs being served through different channels is vague, banks are deploying an omni-channel strategy aiming at seamless interactions between digital and physical channels. The shift in the branch paradigm will have to be complemented by changes across the broader organization: network design, overall channel management, commercial strategy, coverage model, digital integration and readiness, operating model, operational and cyber risks, and HR strategy.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "42a7fd35-6560-4d3d-9631-2a1b4680c5f0", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.6, "x": 0.21, "y": 0.56 }, "kind": "paragraph", "text": "The implications of such a paradigm shift are significant, especially for the GCC region, where banks historically used branch networks as a source of competitive advantage and where, in some countries, customers still prefer physical channels. The main implication is that branch networks have become oversized and not serving their purpose anymore, especially as the transition towards digital channels accelerates. Some banks, especially market champions, captured the emerging trend and started adjusting their geographical footprint as well as complementing the offering with digital products and, in some cases, with digital-first banks.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "72282dc3-d550-48b6-9fd2-fc5d48d80b89", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.6, "x": 0.21, "y": 0.17 }, "kind": "paragraph", "text": "The branch network is, and will continue to be, one of the main elements of the banks' strategic agenda. Branches will continue to be relevant for strategic positioning, comprehensive service models, effective lending and funding strategies, and geographical coverage. Most importantly, branches will play an essential role in building client relationships and will persist as the cornerstone of trust, serving as a source of psychological assurance regarding the bank's credibility, with the ultimate goal of fostering overall trust in the institution.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8d8fa023-a8ab-45b0-95b3-9d806bd67d8f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.18, "w": 0.6, "x": 0.21, "y": 0.72 }, "kind": "paragraph", "text": "The transition journey in the GCC region has already begun, but it is still in the early stages. There is significant potential that is going to be harvested in the upcoming years. Banks across the GCC countries have the potential to further streamline their footprints by more than 623 branches, generating recurrent annual savings of up to USD 3.1 bn. Such potential differs across countries and banks, and the optimization pace will depend on several factors, such as the macroeconomic situation, competition and concentration level, strategic importance of the branch networks, digitalization readiness, and customer expectations. Banks that act fast, holistically, and fully integrate the transformation journey into the overall strategy and digitalization effort will be in a privileged position to harvest the maximum potential and create an impact on their market positioning.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a5e49d4f-7437-4ed3-a119-12c0d1645084", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.6, "x": 0.21, "y": 0.13 }, "kind": "paragraph", "text": "The answer to the initial key question is very clear: branches are here to stay. However, the branch of the future will be different in format, size, and, above all, in role.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "da6101ba-3eba-416d-b49e-8604b3818a7a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.5, "x": 0.21, "y": 0.09 }, "kind": "title", "text": "Conclusion: Are branch networks still relevant?", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "37ebe59e-c38d-4a14-8c65-f9fec1989bd2", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [ { "name": "Three-Act Structure", "slug": "three-act-structure", "agent": "Storyteller", "layer": "slide", "matchId": "0d18a3fd-1f34-4a0e-8184-6c12bed3db55", "evidence": "The implications of such a paradigm shift are significant, especially for the GCC region, where banks historically used branch networks as a source of competitive advantage and where, in some countries, the transition journey has already begun.", "confidence": 0.7 } ], "frameworks": [], "arcBeats": [ { "to": 12, "from": 11, "beatId": "292705c6-d384-47ef-a2c2-74d57af20d07", "arcName": "The Consultant's Gambit", "arcSlug": "consultants-gambit", "beatName": "Impact & Next Steps", "beatSlug": "consultants-gambit-impact-next-steps", "evidence": "Conclusion and key takeaways", "position": 4, "confidence": 0.8, "parentBeatName": "Resolution", "parentBeatSlug": "resolution" } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }