How well do banks know their customers and do they sometimes take them for granted? On the other hand, how does a bank's behaviour impact customer lifestyles and the communities in which they live? How many of our decision makers live in rural areas and do some have a city mindset where if you close one branch there is always another 'around the corner'? Recent research shows two things; there are significant behavioural differences between those who live in the country and city dwellers and decisions to close rural branches have a disproportionate impact on local communities.

To take the first point, comparisons between country dwellers and the rest of the population reveal differences in age profile, employment status, wealth, mobility and technology use and each of these will have implications for the financial services they require.

In the UK at least, those who best need to know their customers have the benefit of the Financial Conduct Authority's report on 'Financial Lives', published in June this year.

The report is the result of a survey of 13000 individuals and provides an insight into regional variations that will impact the level and type of financial services required. It contains large amounts of detailed information but for our current purposes I would highlight the following:

• Of UK adults who never use the Internet, 70 percent (3.8 million) live in rural areas
• Only 50 percent of rural dwellers use the Internet daily, compared with the national average of 67 percent
• Take up of mobile banking is just 23 percent in the country compared with the UK average of 45 percent 
• Compared with the national average twice as many people in rural areas are retired (42 percent). In urban areas, only 15 percent are aged 65+
• People living in rural areas are more likely to own their home outright (42 percent) and are less likely to have a loan or credit product
• Rural dwellers and those living in villages in particular, have higher overall levels of savings and investments
• Adults in rural areas are more likely to use a branch regularly (65 percent) than those in urban areas (39 percent)
• Taking into account, age, health, Internet access etc 48 percent are categorized as 'less able to access financial services', compared with 20 percent in urban areas

The importance of local branches to rural communities cannot be underestimated. On 11 August the results of a survey produced by Nottingham Building Society were released. It is claimed that bank branch closures are in turn leading to the closure of local shops as customers make less visits to the high street. 46 percent of the shop owners questioned blamed the loss of a local bank branch in the past three years for negatively impacting their business, while 24 percent said it contributed to their going out of business in the last five years. 36 percent of consumers said they would make fewer trips to town if the local bank branch closed.

Retail banks operate in an evolving omni channel environment where costs of service provision and competition from new players are an ever-present challenge. As branch visits decline so much of the banks' legacy networks are no longer fit for purpose and there has been a need to address service delivery. Though some branches are being closed this is not the only option and the FCA data demonstrates the importance many customers still attach to the existence of a local physical presence. In delivering the service customers want banks need to be aware of the significance many still attach to the branch visit and the need for one to one communication when it comes to more complex financial decisions. The physical branch remains a key differentiator in the face of competition from new, primarily digital, financial service providers.  Cost savings are important, but not necessarily at the expense of lost competitive advantage. New technologies and innovative branch designs mean you can 'have it both ways' - delivering the physical network many customers still crave in a cost effective and efficient manner.

Of course, each branch is different and decision makers will take into account, the profile of the local community in planning the appropriate level of service in each case. At Glory we continue to work with community focussed institutions worldwide who are committed to delivering efficient, cost-effective customer service via the local branch network, utilising the deployment of best in class technology and the highest levels of personal service delivery.