Give Every Branch a Job That Digital Banking Cannot Do

The branch has a new job, and most banks have not clearly defined it yet. Digital banking has steadily eliminated the routine reasons customers once had to visit a branch, from deposits and withdrawals to balance inquiries and payments. That shift was good for customers, but it left many banks measuring branches against a traffic model that technology itself helped dismantle.

What this means: I believe the better approach is to evaluate branches based on the value they create across an entire market. A branch can help turn a digital customer into a broader relationship, support digital acquisition, or give customers access to expertise that a screen cannot provide.

That requires banks to rethink the branch business case, how employees engage customers, and ultimately whether each location should be built, remodeled, or closed. Check out my full take on this in this episode of my podcast.

Key Takeaways

• Give every branch a clear job. A physical location should provide something valuable that digital channels cannot replicate on their own.
• Measure the market, not the lobby. Branch performance should include its impact on digital acquisition, relationship depth and retention across the market.
• Use existing relationships to create branch demand. The best prospects may already be digital, card-only, business, or wealth customers.
• Connect physical and digital experiences. Personalized invitations, employee context, scheduling, and digital follow-through should work as one relationship.
• Make build, remodel, and close decisions market-specific. The right answer depends on the role a location can play within its broader market.

The Branch Lost Traffic Gradually

I started my career as a teller, when paychecks still arrived in envelopes and balances were updated by hand. I remember a branch model built around routine transactions because those transactions were the reason customers came through the door.

But the branch did not suddenly lose that traffic to digital banking. It lost one reason to visit at a time. Direct deposit removed another transaction. ATMs removed another. Telephone banking, online banking, and mobile banking each took away more.

Every one of those changes was good for the customer. The problem was what happened afterward: We left the branch waiting for traffic that our own investments were designed to eliminate.

That history matters because it changes the question banks should be asking today. Instead of asking how to get the old traffic back, we need to ask what a branch should accomplish in a digital-first relationship.

Reality check: The answer cannot simply be “sell more products.”

Most branch business cases still begin with new households, new deposits, market share, and location-level payback. Those are legitimate financial outcomes, but they miss an important reality: The customer a branch helps grow may already belong to the bank.

That customer might have a credit card but no checking account. They might have opened an account digitally and never met an employee. They might operate a business that the bank lends to while keeping operating accounts somewhere else. The branch can create value by turning those fragmented relationships into something broader.

Give the Physical Experience Purpose

Warby Parker, the eyeglasses retailer, provides a useful lesson because it had to answer a question banking faces as well: Why would a digital customer bother walking into a store?

The company began as a direct-to-consumer brand. Its stores extend that digital model by providing something its website cannot: an eye exam. The appointment itself gives the customer a reason to visit, creates a useful interaction, and establishes the physical location’s role in the broader relationship.

Banking needs its own version of that experience.

A generic invitation to “come talk to us about your goals” is not enough. A useful invitation gives the customer a specific reason to spend time with the bank.

That might be a readiness session for a first-time homebuyer. It might be a conversation about an existing account that is not serving the customer as well as it could. The important point is that the invitation should offer clear customer benefit.

Last year, Bank of America scheduled around 10 million appointments with specialists, even though roughly 90% of client interactions were digital. Those individuals didn’t just wander into the branch randomly. They had a specific reason to visit.

Key insight: That also changes how we should think about branch employees. The employee should have context before the customer arrives and enough expertise to make the conversation worthwhile.

Fifth Third has implemented a version of this approach by giving branch bankers portfolios of clients and making proactive outreach part of the regular routine. A recommendation engine helps determine which customers to contact and which topics are worth discussing. By the time the conversation begins, the banker has context and the customer has a reason to engage.

That is a much more productive role for the branch than trying to manufacture foot traffic.

Measure the Market, not the Lobby

Bank of America and Chase offer two different examples of how this broader view can work.

When I interviewed Will Smayda at Bank of America, what stood out was not simply that the bank was opening financial centers. It was where it was opening them. Before launching consumer centers around Boise, the bank already served business, wealth, and corporate clients across Idaho. The physical locations were being considered in the context of those broader relationships. Bank of America also found that establishing a financial center in a new community was associated with significant growth in digital sales there.