Branchless banking is a distribution channel strategy used for delivering financial services without relying on bank branches. While the strategy may complement an existing bank branch network for giving customers a broader range of channels through which they can access financial services, branchless banking can also be used as a separate channel strategy that entirely forgoes bank branches. According to a 2011 survey, 62% of respondents said the Internet is their preferred banking method. Only 20% selected branch banking - a sharp decline compared with 2007 when 40% of respondents preferred to bank at a branch.[1])
Examples of branchless banking technologies are the Internet, automated teller machines (ATMs), POS devices, EFTPOS devices and mobile phones. Each of these technologies serve to deliver a set of banking services and are part of distribution channels that may be used either separately or in conjunction to form the overall distribution channel strategy.
For example, Cooperative Bank of Kenya uses the Internet, ATMs, POS devices, EFTPOS devices, and mobile phones as technologies to deliver its banking services through a combination of distribution channels including stationary bank branches, mobile bank branches, ATMs, bank agents, Online banking, and mobile banking. All of these are distribution channels, yet only the last four are branchless distribution channels and form part of Equity Banks's branchless banking strategy (Equity Bank refers to its branchless banking channels as alternate delivery channels[2]).
First Direct in the United Kingdom are an early pioneer of this class of service. Launched by the then-Midland Bank (now part of HSBC) in 1989, first direct's accounts are operated solely via the Internet, post, or (principally) telephone, and they do not themselves operate any retail branches (although HSBC branches can be used to make