The evolution of banking in Nepal, like many countries around the world, is characterized by a rapid shift from traditional service models to digital technologies. The introduction of mobile and internet banking, the rise of digital wallets and QR payments are dramatically changing customer expectations and the operating environment for financial institutions.1The concept of "Digital First" is becoming not just a trend but a new reality, forcing banks to rethink the role and functions of their physical branches. However, it is important to understand that "Digital First" does not always mean "Digital Only", especially in the context of Nepal with its unique socio-economic and cultural characteristics.
Nepalese banks face a difficult dilemma: on the one hand, the need to reduce operational costs and follow global digitalization trends dictate the optimization and even reduction of branch networks. On the other hand, maintaining a physical presence remains critical to serve certain customer segments, provide sophisticated products, and maintain trust and loyalty in a culture where personal relationships play a significant role.4
This study aims to comprehensively analyze the current relevance and necessity of physical bank branches for Nepalese customers in the context of rapid digitalization. The main objectives include assessing the changing customer needs, analyzing the status and challenges of the existing branch network, and developing strategies for transforming physical branches to maintain customer loyalty and ensure profitability of banking business in Nepal. The study will review global and local trends in branch transformation, including smart branch and phygital approaches, and offer practical recommendations for the banking sector in the country.
View all episodes
By Alpha Business MediaThe evolution of banking in Nepal, like many countries around the world, is characterized by a rapid shift from traditional service models to digital technologies. The introduction of mobile and internet banking, the rise of digital wallets and QR payments are dramatically changing customer expectations and the operating environment for financial institutions.1The concept of "Digital First" is becoming not just a trend but a new reality, forcing banks to rethink the role and functions of their physical branches. However, it is important to understand that "Digital First" does not always mean "Digital Only", especially in the context of Nepal with its unique socio-economic and cultural characteristics.
Nepalese banks face a difficult dilemma: on the one hand, the need to reduce operational costs and follow global digitalization trends dictate the optimization and even reduction of branch networks. On the other hand, maintaining a physical presence remains critical to serve certain customer segments, provide sophisticated products, and maintain trust and loyalty in a culture where personal relationships play a significant role.4
This study aims to comprehensively analyze the current relevance and necessity of physical bank branches for Nepalese customers in the context of rapid digitalization. The main objectives include assessing the changing customer needs, analyzing the status and challenges of the existing branch network, and developing strategies for transforming physical branches to maintain customer loyalty and ensure profitability of banking business in Nepal. The study will review global and local trends in branch transformation, including smart branch and phygital approaches, and offer practical recommendations for the banking sector in the country.