The Bank Branch Is Dying. Banking Is Not.

For years, the banking industry’s favourite question has been whether fintech would eventually replace traditional banks.

Perhaps we have been asking the wrong question.

The more interesting question is: which parts of a bank are actually worth preserving?

An interview published by Corriere della Sera with Roberto Parazzini, CEO of Deutsche Bank Italy, offers an unusually clear answer.

Deutsche Bank’s strategy in Italy is moving away from the traditional idea of a generalist bank built around branches and towards something much more specialised: wealth management, entrepreneurs, relationship managers, corporate advisory and even investment-banking services for mid-sized companies.

At first sight, this sounds like another banking restructuring story.

It isn’t.

It may instead describe where banking itself is going.

The great unbundling of banking

Think about what customers historically needed a bank branch for.

Cash withdrawals. Deposits. Transfers. Payments. Statements. Currency exchange. Investment orders. Loan applications. Mortgages.

Technology has progressively removed the physical branch from almost every one of those transactions.

Parazzini makes essentially this point: the branch is no longer the natural unit around which banking should be organised.

That matters enormously.

Because once the branch disappears, something else becomes visible.

A large proportion of traditional banking was never sophisticated financial advice. It was distribution infrastructure.

Banks owned the places where financial transactions happened.

Digitalisation destroyed that monopoly.

Today a smartphone can perform in seconds transactions that once required buildings, employees, paper forms and opening hours.

And fintech accelerated the process dramatically.

But here comes the paradox.

The easier banking becomes technologically, the more valuable genuinely difficult banking becomes.