Bank Branches as a Competition Instrument
Banks are making changes in their intentions and strategies in connection with the EU enlargement. Competition, technological developments and customer expectations, as well as enormous pressure on effectiveness of banking business also resulted in quite serious reduction of bank branches number, flic reason is that branching is one of the most expensive ways how to deliver products to customers. But this trend is not unambiguous and is reversible iis latest data confirm. Banks in some countries and some banks especially are underlining that banking is about personal relations between the bank (the banker) and the customer and that such a contact is impossible without conventional branches. That is why these banks are not only offering new distribution channels as electronic, internet, and phone banking but they are very self-restrained in closing down branches, respectively they have not been closing branches down at all. (fragment of text)
- Brook Y., Handershott R., Lee D.: The Gains from Takeover Deregulation: Evidence from the End of Interstate Banking Restrictions. "The Journal of Finance" 1998, No. 6 (December).