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New research predicts significant changes to global retail banking by 2020
Singapore, 25 July 2012 – A new retail report released today by Jones Lang LaSalle emphasises that changes across the global retail banking environment continue to be driven by political, economic and technological trends. These trends will lead to continued bank expansion in frontier markets, offsetting the search for greater efficiency in developed markets.
The report, entitled Global Retail Banking: key trends for retail real estate, identifies that changes in global retail banking will be fuelled by increasing customer demand for innovation, flexible service capability and banks actively managing their brand’s presence in a retail environment. These drivers will result in retail banks making substantial changes to their established branch networks in developed markets. As a result, Jones Lang LaSalle predict that as much as 50% of existing retail bank branches in the developed world will be obsolete by 2020, as banks assess their space requirements. However, this decline will be offset by increased numbers of retail bank branches in developing countries such as Brazil, China and India.
Iain Mackenzie, Head of Jones Lang LaSalle’s Banking Industry Group in Asia Pacific said:
Asia Pacific is a region of contrast with mature markets such as Australia and Japan sitting alongside developing markets including Indonesia and China. The key to success here will be to develop a far more customized branch network able to service a customer base that ranges from people still making physical cash deposits or taking out $100 micro-loans, through to high-net-worth individuals demanding personalized services and first-class experience.
Technology is the game changer. For banks in developing markets that are not as invested in legacy systems, there is significant opportunity to bypass the large, expensive and potentially obsolete physical branch networks and explore alternative channels that are flexible, mobile and tailored for their customers. This ability to customize and the flexibility to bring innovations to market quickly may provide many banks in this region with a competitive advantage over their Western counterparts, similar to what we have seen in the telecommunications industry.”
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