Do branch banking networks really matter for Pakistan?

Even with digital banking on the rise, some banks are focusing on classic brick and mortar branches

There was a time until  embarrassingly recently when it mattered what ‘branch’ you had opened your bank account in. There were certain services only that branch could provide and in exchange they asked for and collected an infinite number of copies of your identity card. 

However, as of the past few years, it is possible to open an account in any bank, not know which ‘branch’ the account is being opened in, never visit said branch and still maintain the account. This is largely a result of the digitization of banking. 

This, however, does make one wonder, why branches even exist in the first place, especially in a digital first world. Well, for starters, there isn’t much reasona for them to exist. Or even if there is a reason for them to exist, it makes no sense for there to be as many branches as there currently are. Branchless banking is defined as the delivery of financial services outside conventional bank branches. These are often based on IT and communication platforms such as point of sale terminals, specialized machines, and mobile phones.

For some global banks, branch closures have managed to outplace branch openings over the past several years. In global context, the number of bank branches in the UK roughly halved from 1986 to 2014 and have continued on a downward trend. However, in Pakistan, in what may seem a counter-intuitive move some banks are increasing their brick and mortar branches because of the unique banking dynamics that exist in the country. 

Standard Chartered: swimming against the current

Some banks are increasing their brick and mortar presence in Pakistan. This is primarily due to the local dynamics and the growth stage at which banking customers and banks themselves are at.

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Ariba Shahid
The author is a business journalist at Profit. She can be reached at [email protected] or at twitter.com/AribaShahid

2 COMMENTS

  1. In pakistan people still deal in cash and forward dated cheque
    As long as people use cash branch banking will always be effectively profitable.

  2. Pricing incentives will be needed to push folks away from cash and cheque. Make services frmo branch twice as expensive and people will adopt. Payorders are a different story as the real estate and auto sectors would continue to rely on them unless, again there is some sort of regulatory intervention or robust innovation by a player. The system will continue to function in this hybrid manner for the foreseeable future I feel. Hope I’m wrong.

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