That is a multi-tiered answer. The internet, yes, but not by itself. Certainly on-line banking services have made life more convenient than it once was. I include automatic payments, direct deposit, et al. It is but a part of the decline in brick-and-mortar growth. Another factor is the proliferation of ATM machines and all of the services they offer. IMHO, the biggest contribution to the decline is all of the mergers and acquisitions over the past 6-8 years. There are simply fewer banks (corporations) than there once was. Bank A merges with or acquires Bank B, along with all of the financial assets and brick and mortar buildings. They evaluated and closed branches in cities where they (because of the acquisition) had multiple sites and market overlap. Too big to fail has offered a number of well-documented problems, one of which (for security vendors) is too big to grow.
New FI regulations along with some harsh lessons learned have also caused financial institutions to be a good bit more cautious than in years past.
Did the internet itself make the dent, no, but it is a factor. All three of these hitting at nearly the same time make for a decline in sales to be sure.
IPVMU Certified | 05/07/15 05:58pm
Isn't there opportunity to be had as well, since although branches are closing, ATM's and mega-ATMs, and even tellerless branches are on the increase? With new construction comes new security requirements, as well as specialized video requirements:
The smaller “smart branches” are about one-third the size of a regular branch and won’t have any tellers, at least in the traditional sense. Customers who want to do business with a teller will be able to speak to one via video. The teller, who won’t actually be in the branch, will be at one of a handful of “customer contact centres” across the country. The test branches are also missing the traditional wall of offices. But customers who want privacy for services such as financial planning will have access to conference rooms where they can connect with specialists — again via video.
No walls=more security, no?
Here's a report citing Bank of America cutting 1,200 branches in the past 5 years.
Some interesting points mentioned about why they are cutting branches:
"The number of mobile banking customers has more than doubled in the past four years to more than 17 million people. Now, 13% of Bank of America’s checks are deposited via mobile."
"The bank is seeing about 10,000 customers a week book appointments online to come into the branch, up from 2,000 a week last year. This allows the bank to better anticipate the need for staffing, and adjust staffing levels accordingly."
This is on the retail side, but seems to be a similar trend. Macy's, one of the largest department stores "has closed 52 stores and opened 12 new ones" in the past 5 years plus they plan to close as many as 40 stores in 2016.
I am still curious how this is impacting the banking / retailer video surveillance business. A decade ago, when business was booming, this was clearly helped by non-stop store expansion. Now?
There’s no mistaking new brick-and-mortar starts are down and foot traffic to existing stores are down. Consequently retail is being very conservative about any new spend.
The only good trend is acquisition that leads to corporate integration of video systems or installation of entirely new consolidated systems.
Our play of course is to help retailers make the most of what they have by providing inexpensive systems that help them operate the business more efficiently and thus help sales.
But I think your original proposal is valid—fewer stores and fewer customers mean a lower overall need for traditional video surveillance.
Interesting report from the U.K. on the the failure of self-service banking in the wake of ~2,000 branch closures in the last decade there.
‘This is being driven primarily by cost,’ he says. ‘They all want you to do as many transactions as possible yourself, whether you are doing it online or are doing it on a machine in the branch. ‘It means they need fewer staff, and so I think they will continue remorselessly down this route. They view it as some form of progress — irrespective of what customers are telling them.’ The rise of internet banking does mean people visit their local branch less often than they used to. The British Bankers’ Association claims footfall is dropping by 10 per cent a year.
And to Steve's and John's point, these replacements no doubt have security, though a lot of is just cameras in the kiosks and other built-ins. Which doesn't leave much for the local integrator.
Simple Bank is an online bank based in Portland, OR, they are growing rapidly. Young people tell me that Simple fits their life styles much better than the traditional banking model.
I think it's more the mentality of the new generation. I do a fair amount of work in banks and retail. Retail side seems weird to me, always opening, don't see a ton of closing, but recently one of the big banks here in Canada has started closing a lot of it's branches.
When I'm working in a bank I mostly see, for lack of a better term, older people. I myself am 25, and would say in the hour or two I typically spend in a bank the customers I see are mostly 50+. In these rural areas where they are closing branches I imagine it just has to do with all the younger folks a) moving out of the small towns and b) not needing to go into the branch, or just bank when they are in the city, where they work.