It is not often that I go to the local banking branch as my wife does most of our banking. It was lunch time and I noticed that it was very quiet. There were two clients who were older than myself (yes, I felt young). I started thinking that this was different than when I worked for two major banks. I was not surprised. Years ago, telephone banking had just started and at the time, we thought this would lead to a decline in banking.

I started looking at recent bank statistics to investigate whether my hunch was correct. In the year 2000, 29% of Canadians did their banking at the branch. As of 2014, this percentage decreased to only 13%. That is quite the drop. Today we use ATM’s, deposit cheques using mobile phones, and 55% of us do our banking online. This can only lead us to future bank closures. Let’s look at our neighbours down south. At Citigroup, they closed 15% of their branches. Bank of America closed 234 branches and JP Morgan closed 300 as well.

In Canada, we have over 10,000 branches and I suspect that this will drop in great numbers over the years. Banks will forego physical real estate and traditional services. This will be excellent for bank profits, but will service suffer? Needless to say, I say yes. Let’s take a look at BMO who are testing a new branch in Chicago. These smaller “smart branches” are one-third the size of a regular branch and will not have any tellers. If you want to talk to a human being you can speak to a bank representative via video. Not exactly my idea of personable. In Canada, where will this lead us in terms of mortgages? In today’s mortgage environment, 85% of potential mortgagors like using the local branch. As I look into my crystal ball, I sincerely believe that this will eventually hurt the bank. Mortgages are very personal. Can you imagine talking with a bank representative via video? To me it is quite impersonal. A mortgage is the largest item that a consumer purchases. I am very proud to be a mortgage advisor. I left a major Canadian financial institution to begin this career…but why?

I realized that I was in a better place for the consumer where we could shop for the lowest mortgage rates. Where we can plan to pay the home intelligently so that money can be saved and life can still be enjoyed. Where we educate our mortgagors to better understand the process and make better decisions. Where clients can call me years later and still find my services ready to assist. Yes it is personal. I enjoy the ability to be a fabric of their lives. I realized that when I worked in the Canadian banking system that they only changed the ideas when they made money or saved money. Going forward, this idea of not servicing the client can only hurt. It will save the financial institution money, but I might buy some bank shares.

Robert Floris is an independent mortgage broker at Mortgage Architects in Hamilton, Ontario.