Branch Transformation

Branch transformation: 4 strategies to follow

Here are four strategies to follow for a successful branch transformation.

Photo: Adobe Stock

January 28, 2025 by Bradley Cooper — Editor, ATM Marketplace & Food Truck Operator

The number of bank branches has been on the decline since 2016, going from a high of around 80,000 to just under 70,000 at the end of 2023, according to data from statista. However, even as this number has decreased, banks are not ditching the branch. They are instead developing new strategies of branch transformation to make their spaces more effective and improve the overall banking experience.

The reason for this is despite declining usage, customers have not abandoned branches. In fact, a 2024 study by J.D. Power, found that 60% of young adults had visited a branch within the last three months, according to a report by Bankrate.

Branch transformation involves taking existing branches, removing unnecessary elements and adjusting the space to meet the needs of modern customers for a better banking experience. This involves not just the physical space itself, but also training existing employees or hiring new ones and installing new self-service solutions, such as teller cash recyclers.

Here are four strategies to follow for a successful branch transformation.

Remove barriers

One of the key elements to the branch of the future is removing barriers to banking services. This can take a variety of forms. For one, it may be removing the traditional teller lines so there isn't an obvious divide between the banker and the customer.

In its newer branches, Bank of America, for example, has converted its teller windows into offices with dedicated bankers. When customers enter the bank, they can utilize iPads or speak to bankers up-front to set up an appointment for more complex financial needs.

On another level, this can involve creating an entirely different environment that mirrors the traditional coffee shop. An article from Forbes discusses how Capital One combines branches with coffee shops to act as a "sales-free environment," to allow customers to learn about Capital One on their own terms.

On a deeper level, branch transformation should focus on removing barriers to banking services in general, by refocusing on financial education.

Branch transformation = financial education

One of the biggest trends in banking is the move away from traditional transactional relationships to an informative role.

Due to the proliferation of mobile banking tools, ATMs and other services, customers can perform many traditional banking transactions without visiting the branch, including deposits, withdrawals, checking balances and even opening accounts.

However, customers do want the branch to deliver financial education for big life events, ranging from loan applications, mortgages and other big financial decisions.

Marsh Womack, first VP, director of retail banking at Citizens Trust Bank, said this financial education should take place all the time at the branch.

"A good banking experience goes beyond the transaction- even if all you do is the transaction. You leave with more knowledge, more understanding and a deeper appreciation to your partner-the financial institution of your choice," she said. This involves "positioning ourselves as the expert with our clients and the importance of having the needs met conversation with each interaction."

Universal bankers

In order to deliver this advice, banks need to have the right employees in place and this is where the universal banker comes into play.

Glassdoor defines the universal banker role as a newer one that are, "specially trained and equipped to handle a wide range of tasks related to banking and can manage sensitive financial customer requests from beginning to end. The position was created in order to meet the demand for ease of use when interacting with banking representatives. To do this, a universal banker reduces the required steps to as few as possible and can supply full-scale banking assistance with no need to transfer service to other departments."

In other words, a universal banker does more than just manage money and transactions. They communicate with customers on a deeper level to discover what the client needs and they point them in the right direction.

For example, if the client just needs to make a deposit, a universal banker can show them to the nearest ATM and how to use the deposit features. If the client wants to refinance their house, the universal banker can get them set up for an appointment with a dedicated banker.

This fits into the overall trend of removing barriers to banking services.

Self-service tools

Lastly, banks should not look at branches as purely physical places. They should instead integrate multiple digital elements into the branch to provide an omnichannel experience. This can in turn help free up employees who can focus on interacting with clients instead of simpler tasks that technology can automate.

This is where self-service banking tools come into play. These tools can automate various tasks such as cash counting and also offer expanded banking services such as video banking.

Here are a few examples of self-service banking tools:

Video ITMs that can either offer virtual employee consultation or integration into core banking systems to provide other services such as loan payments, questions and more.
Cash recyclers within ATMs/ITMs to take customer deposits and reuse them for withdrawals, saving time on cash replenishment and reducing downtime.
Tablets at the entrance for customer check-in, scheduling appointments or other banking services.
Digital signage offering information on promotions, credit cards, CDs and more.

Conclusion

The true goal of all of these strategies is to create a branch experience that put the power in customer's hands.

"In essence, while good retail banking meets basic customer needs efficiently, great retail banking elevates the experience by focusing on personalization, proactive service, seamless technology integration, transparency, excellent customer service, financial education, and community engagement," Prakash Paudel, head of transaction banking sales and business at Global IME Bank, said.

It's all about creating a experience that is customized for the individual customer's needs. Branch transformation should be part of a larger strategy of delivering a truly impactful omnichannel experience that is consistent across the board, whether the customer uses online, mobile or the branch itself.

About Bradley Cooper

Bradley Cooper is the editor of ATM Marketplace and Food Truck Operator. He was previously the editor of Digital Signage Today. His background is in information technology, advertising, and writing.

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