Is the branch doomed? If you want to understand what is going to happen to branch-bank networks in the future, you should look at another example of a massive shift in technology adoption that is taking place with respect to telephone landlines and mobile telephones.

• Author: Albro, Walt
• Position: Interview

In 1997, 97 percent of U.S. households had a telephone land line. Then along came the mobile telephone. In June of 2010, the National Center for Health statistics stated that one out of every four Americans has given up their landline phone and are now using their mobile phone exclusively. By 2015, the percentage of households with a landline is expected to drop to 36 percent.

Owning the physical network infrastructure is not enough to save your business from changing consumer behavior, according to banking consultant Brett King, author of the new book, "Branch Today, Gone Tomorrow: The Case for the Death of Branch Banking!' He argues that changing customer behavior will kill your bank--unless the bank adapts to evolving consumer attitudes.

Walt Albro, editor of ABA Bank Marketing magazine, recently spoke with Brett King and asked to him for more details about his vision for the future of banking. Their conversation is recorded below.

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Is the existing bank branch distribution system going to die?

Not completely, but some may very well call a 50 percent reduction in branch numbers over the next decade the death of branch banking. Some might claim that the system is already in its death throes with plummeting in-branch activity across the board.

The fact is that we're realizing that the branch is a poor fit with the day-to-day behavior of most customers. By 2016 the average customer will use his or her mobile phone to access the hank 20 to 30 times a month and Internet seven to 10 times per month. That's around 400 times a year. The problem for branches is that those same customers are likely only to visit the branch one or two times a year in 2016. You can't have that magnitude shift in channel priority without an impact. The only reason it hasn't already pened is that the industry lags in key processes like know your customer (KYC) that force customers to come into the branch when they don't really need to.

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What is it about changing consumer behavior that is hurting the branch?

The same thing that killed bookstores and video rental stores--a change in core distribution modality. For books it was the "e book" and the online bookstore. For video it was downloads, streaming, NetFlix, Hulu and iTunes. For the bank it is mobile banking, mobile payments, Internet banking and the loss of many physical artifacts associated with banking (checks, paper statements, application forms and soon the card...