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Are branches endangered iUSA TODAYi says no
NEW YORK (11/18/11)--With more consumers choosing online banking and using ATMs and mobile channels, are brick and mortar branches an endangered species? Not necessarily, said USA TODAY's Thursday edition, but branches are changing.

Bank customers are embracing online banking: 62% of those surveyed indicated they prefer to bank online, up from 36% from last year, according to newspaper's personal finance columnist, Sandra Block, citing an American Bankers Association survey conducted in August. Meanwhile 20% of respondents said they preferred a branch, compared with 25%  last year. About 57% of customers age 55 and older  preferred online banking, compared with 20% last year.

Many customers still value the human touch, bute too many branches exist  to serve the shrinking number of customers who use them, Celent senior banking analyst Bob Meara told the newspaper. The total number of branches declined since 2009,  but today there's still nearly four times as many branches as there were in 1970--when there were no ATMs or online banking.

Meara also noted that the decline in bank revenue sources (such as fees) is making it more difficult to justify the cost of maintaining branch buildings.  Downsizing  branch networks would save money for banks looking to recoup revenue, but so far few have closed branches and some are opening new ones to meet their customers' demand.

The article noted banks are updating their branch networks by targeting specific markets in areas they don't have a big presence in and using the branch to get a foothold in the community;  offering "specialty stores" that dispense advice on more complex financial services such as mortgages; focusing on time-intensive small-business consumers; buying the competition's and its branches to extend their reach; opening virtual branches or using technology to extend their reach; and outsourcing branch functions to other entities such as the United Postal Service.

The article noted that credit unions offer use shared branches to widen their reach; use virtual branches and technology to help them provide full financial services, and use outsourcing.

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