Future Branches 2019

November 18 - 20, 2019

Hilton Austin, Austin, TX

How to Keep Bank Branches Relevant in the Digital World

Brought to you by WBR Insights



The inexorable onslaught of digital technology and online connectivity is offering both challenge and opportunity to industries all over the world. However, the banking industry is arguably finding digital transformation more challenging than most - the future of the physical branch seems unclear at best.

2018 saw another record year for bank closures across the US. As more and more people migrate to online banking and alternative financial service providers, brick and mortar banking has been defined by widespread closures in recent years, with branches closing their doors totaling 1,947 branches in 2018, up from 1,919 in 2017. Wells Fargo reported the most closures in 2018, at 293, or roughly 5% of its overall branch footprint.

Our friends across the pond are not immune either, with the United Kingdom losing over a quarter of its physical branches over the last decade. How then can banking brands buck this trend, and make sure they stay relevant in the digital world?

Bank Closures

This pattern of bank branch closures is set to continue through 2019 and into 2020, with few analysts foreseeing the pattern changing. However, there remains an opportunity for the physical branch to continue driving value for their customers.

"It's obviously not going to go to zero, but I would expect it to continue," said Finance Professor at Auburn University, James Barth. "Banks are deciding you don't need as many branches. You need them in strategic locations where you can have the biggest bang for your buck. When branching networks overlap, you shut the branches that you think are least profitable if you're a bank acquiring another bank."

So, according to Barth, physical branches still have a role to play in the post-digital finance world. However, banks must focus on establishing their remaining branches in the most ideal locations and offering modern services which will keep drawing people through their doors.

As we discussed in our previous article, and contrary to what one might assume, GenZers are more likely to use bank branches than any of the proceeding generations. However, they still favor digital experiences and want to deal with brands which can provide them.

Digital Transformation

Bank customers today have become accustomed to digital service in all areas of their lives, from media consumption to shopping. However, they still prefer a face to face conversation for more detailed needs.

Digital transformation can help to facilitate this. Bank brands should focus on incorporating as many self-service terminals as possible, so customers can carry out more simple transactions - withdrawals, deposits, balance transfers, etc. - without the assistance of a branch employee.

This will free up more of your staff to help customers with the much larger financial pain points in their lives. The problem many branches face is that they only have a relative handful of staff on hand to advise on things such as mortgages and business loans at any one time, so by incorporating more automation to the branch offering, you can expand the number of advisors available.

"Research reveals most customers prefer branches over digital channels when opening new accounts for both simple (such as savings accounts and debit cards) and complex products (such as loans)," reports Deloitte Insights. "This was true in developing countries, such as Mexico and Indonesia, as well as in developed countries, such as Spain, France, Germany, Japan, the United States, Canada, and Switzerland."

The preference toward branches for interactions such as opening new accounts is uniform across generations as well - Baby Boomers, GenXers, Millennials, and GenZers. 64 percent of Boomers, 54 percent of GenXers, 48 percent of millennials, and 56 percent of GenZers surveyed said they prefer to visit branches when opening a new checking account, for example.

Final Thoughts

Physical branches still clearly have a role to play in the financial lives of their customers. However, as the migration to online banking continues, that role must shift to meet the needs of those customers. By moving away from day-to-day interactions such as deposits and withdrawals, and by handing those tasks over to digital technology, bank staff is free to help with the services for which customers demand human interaction.

Banks will capitalize on these trends by "integrating digital and technology advancements into the branch experience and, conversely, encouraging the human touch in digital experiences," concludes Deloitte Insights. "As bank leaders execute on their digital transformation strategies, we urge them to fully recognize the value branches offer and keep customer preferences on top of mind when repositioning branches."


Digital transformation and bank closures are set to be hot topics at Future Branches 2019, being held in November, at the Hilton Austin, Austin, TX.

Please download the agenda for more information and insights.