How In-Person Banking Can Survive the Digital Age
In the U.S., most efforts to re-invent the branch experience have been tentative, piecemeal, or me-too. (The bank as coffee shop, anyone?) Banks searching for fresh inspiration and more far-reaching ideas should look beyond our borders.
By Jon Blakeney, Co-Owner and Founder I-AM
Over the past six months, 539 bank branches closed in the U.S.. It’s just the latest statistic in a well-known trend as banking moves into the digital realm. It’s been happening for more than two decades and shows no sign of slowing.
But this shift to digital should not spell the end of physical banking as we know it. Instead, there is an opportunity for banks to innovate. If they can get it right, this innovation may help banks to tackle the host of ongoing challenges they face, from Gen Z mistrust to a new generation of digital disruptors.
It won’t be easy to get right. The banks that deliver useful, popular and successful in-person banking experiences will need to be best-in-class in a wide range of areas. Here’s what they need to be looking at.
What Should Branches Become?
If banks want people to visit their branches they need to offer more there. Partly this is about getting the basics right, like being open at the times people want to visit. The recent announcement by the UK’s Metro Bank that it will stop opening on Sundays and outside of the nine to five feels like a step in the wrong direction. Which retailer could operate like that? Banks need to be more, not less convenient.
Furthermore, today’s consumer quite rightly expects banks to not merely support environmental and sustainable causes but to actively be using those principles within their work. Pioneers like The Co-operative Bank in the UK have been asking us to help them in this area for more than two decades, and the approach is spreading worldwide: We recently helped Saudi National Bank adopt best sustainability practice.
There is much more that banks can do to integrate their digital and physical experiences in branch in the way that retailers and casual dining spaces are now doing. Indeed, banks could look more closely to hospitality for inspiration in many areas.
For the past two decades, retail has been their model, but while shops have actual products they can showcase, banks’ products are far less tangible. It’s time for banks to explore how hospitality brands like Citizen M, 25Hour Hotel, Hoxton Hotel and Coppa Club intuitively create environments that are welcoming, relaxed, well-lit and entice people to stay.
Examples of Diverse Experiences
Turkey’s İş Bank recognised that need for a more people-centred approach, when creating their new concept IsMekan which transformed the traditional branch model into a community hub – a space with benefits reaching far beyond financial services. As well as offering traditional banking, the branch became a facilitator for cultural and social engagement; offering co-working areas, a café, and events while incorporating the bank’s commitment to art, culture, and sustainability.
Likewise, UK’s Virgin Money’s innovative B-Works concept, which was launched in Manchester, reimagined the bank branch as a ‘space for social learning’. Targeted at primarily young entrepreneurs, it was designed to create ways for customers to explore new thinking about how to balance life and money. The space is more than a bank: it’s positioned as a destination where consumers feel fully supported in both their private banking and business needs.
That’s reflected in the flexible design of the interiors, which offer dedicated private spaces for clients needing confidentiality as well as more casual co-working areas. The site also features a separate event space for customer-oriented activities and pop-up collaborations with other brands. This holistic approach makes B a place people want to visit, blending banking with community and lifestyle elements.
This transformation echoes the potential for banks to evolve beyond traditional spaces and build lasting connections with customers through diverse experiences.
Looking Beyond the Branch
There is still significant scope for improving the branch network, but the greater opportunity may lie beyond branches. Why do banks need people to come to them? Why can’t the banks also go to the people? They could look beyond their historic reliance on branches and instead explore the idea of residencies. The practice of artists, chefs or DJs being hosted in new locations for a certain period of time is well established. Why can’t banks do the same?
A bank residency could be a temporary, flexible, and highly specialised engagement with a specific community, organisation, or industry, offering tailored financial solutions and services. It would blend elements of financial literacy, customised products, and direct engagement, much like an artist-in-residence programme bringing creativity and education to a location.
For example, a bank residency could foster economic growth in areas that need it, by providing low-interest micro-loans to small businesses, offering subsidised mortgages, or offering accounts to people who have struggled to get one before.
Or they could take up residencies in tech or innovation hubs, offering incubator services where startups or small businesses gain access to financial expertise, seed funding, and connections to venture capitalists or investors.
The possibilities are far reaching. Banks could partner with eco-friendly communities or sustainable businesses, where the focus would be on green finance solutions, such as offering low-interest loans for renewable energy projects or investments focused on sustainability.
A New Approach to Banking
There’s a slightly ironic conundrum that banks and credit unions would do well to consider: Banks don’t want branches, but they need them; customers don’t need branches, but they want them.
Unlocking the potential and value here is about maintaining physical points of presence but re-inventing their role. They need to become venues not for ‘lower order’ basic transactional activities, as dominated their activity in the past; but for ‘higher order’ financial life support for communities and individuals. It’s the latter that explains why customers want branches even when there’s no apparent functional need.
Our research shows this time and time again: people want conducive places to visit for high quality support conversations and advice-based relationships, and that is why banks still need branches.
It means that branches are here to stay, but there is much that banks must do to improve them. Stop seeing them as a burden and instead embrace the opportunity. Look at the UK’s most famous retail brand, M&S. Not long ago it was in the doldrums with drab stores and dwindling revenues. It could have shifted entirely to digital, but it didn’t. It developed its digital offering but also invested in its retail experience, transforming its stores into spaces staff and customers want to be in. The result? In May it announced a 9.4% revenue increase and a growth in profits from £475.7m to £672.5m.
Banks should think bigger, be more radical, visionary, experimental and creative.
It could even transform how we see banks, making them less remote judges of financial viability, and more trusted enablers of our lives.
Jon Blakeney is a serial entrepreneur and a designer of brand experiences. His company, I-AM, is an independently owned, insight-driven, brand experience agency that employs over 120 creative doers and thinkers across studios in London, Istanbul, Dubai, Jakarta and Riyadh. Current clients include P&O Cruises, Virgin Money, Cote Restaurants, Emirates Post and Centre Hotels.
