Population composition Technology adoption remains somewhat stratified among the di¥erent demographic cohorts. Studies have shown that Generation Y (Gen Y) and Millennials (classified as those born from 1977 onwards) are more likely to be adopters of electronic banking technology. For this cohort a large component of their banking activities is conducted remotely via apps and the Internet. Looking towards the older generations, the proportion of banking activities conducted via new technology declines, especially for Baby Boomers (born 1946-1965).
There are several reasons for this: lack of familiarity with the new technology, a preference for face-to- face interactions, and the need for more complex financial advice. Baby Boomers, though, hold most of the deposits and assets being held in banking instruments, and therefore remain key customers of banks. For this reason, banks must continue to meet their needs, which at least for the time being, includes in-person interaction within branches. Longer term strategies The true value of the bank branch over the long-term remains unknown. For example, while Millennials currently whether this will change to a more face-to-face setup as they seek more complex advice on larger and more financially significant transactions. Notwithstanding this, given current trends, it is apparent that while the role of the physical branch remains relatively secure in the near-term, the monopoly it once held has been, and will continue to erode. conduct much of their banking activities remotely, it is unclear
Strong growth will continue to be recorded in India, China and the Association of Southeast Asia Nation (ASEAN) countries. In line with this, the number of retail bank branches is expected to increase over the next few years. As a result, it can be expected that real estate costs will also proportionately increase. More muted growth is expected in developed countries such as Australia, Hong Kong and Singapore, while the population of Japan is forecast to decline. It is in these countries that we expect the size of bank networks to moderate.
BRANCH NUMBERS IN ASIA PACIFIC, 2012-2014
Growth rate %
160,000 Branch Numbers
2 “ATM and branch networks continue strong growth in Asia’s Emerging Markets” http://www.theasianbanker. com/updates-and-articles/atm-and- branch-networks-continue-strong- growth-in-asian-emerging-markets
Growth rate %
Source: The Asian Banker 2
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