Brick & Mortar Strikes Back

January 09, 2014 at 3:10 PM

by Vanessa Mambrino

Bitcoin’s recent decision to sign a 10-year lease on a storefront office space in downtown Manhattan has two important implications:

  1. Bitcoin may be here to stay.
  2. There is still a place for branches in the retail banking business model – and banks may be starting to figure out what exactly that is.

We know what you’re thinking.  Isn’t it a bit of a stretch to draw such a big conclusion from one event?  Doesn’t the article flat out state that the “Bitcoin Center” is not a branch?  Yes, but we politely disagree.

The Bitcoin Center is a place where individuals can learn more about Bitcoins; get assistance in acquiring, storing, and spending Bitcoins; engage in Bitcoin mining; and get advice both from staff and from experienced Bitcoin users (via meetups).  The Center also plans to host meetups of Bitcoin startups (companies that are developing services to make the use of Bitcoins more accessible to the general public) and a currency exchange (based on, you guessed it, Bitcoins).

Put another way, the Center is a physical location where customers can learn about new products, get assistance in using the products they already have, purchase additional products, and meet others who may be able to give them advice on other issues based on their past experience.  In this context, it sounds a lot like many of the branch models that are held up as best practice examples today.

So the real takeaway here may be that “branches” can be a viable part of the delivery of alternative payments products.  The Bitcoin Center is designed to meet a strategic and customer need for education; after all, individuals who aren’t comfortable using Bitcoins can’t help the cryptocurrency to grow.  New retail banking delivery models are also based on identifying a customer need and tailoring the branch to meet that need – one of the most recent examples being Seacoast National Bank’s Accelerate branches.  Retail bankers can take comfort from the fact that if the strategy of the most digital company dovetails with that of one of the least digital industries, then the latter must be on to something.

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