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Wednesday 21st March 2012
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New report identifies keys to success for in-store banking

In some countries, in-store financial services have been a success, while in others, cultural and other factors have impeded growth. The reasons for this variation and the keys to success are presented in In-Store Banking: Best Practice and Case Studies, the latest in a series of executive reports published by RBR.

In-store branches have played an important role in delivering retail financial services for more than a hundred years. The types of institutions that have made use of banking outlets located within stores include banks, credit unions and retailers-cum-bankers. A more restricted range of financial service products may also be offered by retailers on an “own-label” basis, sourced from authorised institutions and delivered through branches that they operate in their stores.

Some of the advantages to be gained from the deployment of in-store bank branches are:
1. Ready access to shopper footfall of a predetermined nature and volume;
2. Lower branch development and building costs;
3. Speed of construction and time to market;
4. Opportunities to carry out joint promotions with the host retailer.

The 1990s saw a rebirth of in-store banking in America. Figures published by the Federal Deposit Insurance Corporation (FDIC) in the USA show that the number of in-store branches operated by registered banks rose nearly 60% between 2000 and 2010 to reach more than 5,000. To this must be added an estimated 1,000 or more outlets deployed by credit unions. Overall, in-store branches account for around 5% of the national retail banking network in the USA.

With banks in other markets taking their lead from developments in the USA, a new generation of in-store branches has since emerged in many countries across the world. In Asia Pacific and South Africa, for example, not only does this type of distribution channel provide convenience to the principal target segments of the banks, but it also plays a major role in meeting the needs of lower earners.
The same success has not been evident in all markets, for example the in-store branch concept has never gained momentum in the UK, despite its historical presence there.

The RBR report emphasises that once a target location has been identified, a thorough investigation into its viability should be carried out. The factors which underpin a successful programme are now much better understood and should be carefully analysed. They include aspects that could compromise a programme, such as insufficient or inappropriate footfall and local culture.
The report concludes that in-store branches are a proven viable channel for delivering financial services, and so long as appropriate planning is undertaken, the sector has significant potential.

(source : RBR)