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News release


From Bricks to Clicks: FinTech Driving Bank Branch Transformation

JLL outlines the key real estate trends defining the future of retail banks

CHICAGO, April 25, 2017 – Consumers are more mobile than ever, and the banking industry shows just how quickly innovations alter consumer behaviors. It took decades for simple cash-dispensing ATMs to be accepted, but now mobile apps and FinTech define the entire future of banking real estate.

While the recession forced banks to tighten operating costs and halt branch growth, mobile banking picked up momentum. As a result, banks are consolidating and optimizing locations. JLL's 2017 Banking Outlook reveals that the recession and consumer technology have led to a near-8 percent decline in U.S. branch banks since 2009, according to the FDIC. At the same time, new branches are still being built to fulfill market needs, indicating a robust and evolving industry.

"The branch strategy of relying on sheer numbers to win market share is a thing of the past, and now banks need to focus on a customer-centric real estate approach," said Geno Coradini, Executive Vice President and Lead of JLL's Retail group. "Mobile apps and FinTech have transformed how we bank, but branch banks don't need to compete with these tech advances. Instead, they should leverage them to maximize real estate cost savings and the customer experience moving forward. Technology brings a sea of change to retail banking, but the industry isn't drowning; it's evolving."

With a massive real estate shift underway, JLL's new report lays out the must-know trends for retail banks:

  • The number of branch locations will continue to shrink, and we won't miss them. With banks adapting to consumer needs, there could be a 20 percent reduction in branch locations as leases expire over the next five years. While customer access to branches remains important, the necessity of a branch network is being balanced with advances in mobile platforms and FinTech, and fewer locations could lead to $3.2 billion in annual cost savings.
  • Mobile apps and broader FinTech applications will streamline personal and business banking. Mobile technology allowed early adopters to complete simple banking transactions without ever entering a branch or even using a computer. Now, customers expect to do more than transfer funds from their smartphones, and innovations will further expand mobile capabilities.
  • Bank branch size will shrink, saving billions in real estate costs annually. Consumer trends have led to less utilized space in bank branches. By downsizing remaining branches by 2,000 square feet, and reusing or subleasing surplus space if possible, banks can save over $5 billion annually.
  • Not all branches will be created equal. As banks tailor branches to meet customer needs and regional demographics, full-scale operations and "convenience" locations for basic transactions will be peppered in their real estate portfolio.
  • Automated branches are coming. Consumers today are more accepting of banking innovations than in years past. Moving forward, expect to see greater use of remote tellers assisting with basic transactions.

"The introduction of automated tellers is pivotal for banks to limit real estate costs, however it will take time for customers to fully embrace a technology that introduces a whole new customer service experience," said Coradini. "Optimizing market coverage is neither quick nor easy, but the long-term cost savings from this shift can be significant as banks also eliminate and shrink existing locations."

For more insights on the outlook for the retail banking industry in 2017 and beyond, download Banking Outlook 2017: Navigating a Sea of Industry Change.

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2016, JLL had revenue of $6.8 billion and fee revenue of $5.8 billion and, on behalf of clients, managed 4.4 billion square feet, or 409 million square meters, and completed sales acquisitions and finance transactions of approximately $136 billion. At year-end 2016, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of more than 77,000. As of December 31, 2016, LaSalle Investment Management has $60.1 billion of real estate under asset management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit