How the Role of the Branch is Being Reimagined
The traditional teller counter is giving way to collaborative meeting areas, digital kiosks and AI-powered assistance, while branch staff evolve from transaction processors to financial advisors. Research shows this transformation responds to genuine customer needs, with over 40% of consumers still valuing personal interactions for complex financial matters.
By Marnie Thorp, Senior Marketing Manager at Candescent
As the banking industry continues to face pressures to transform and modernize, the branch network is undergoing a fundamental shift. Traditionally synonymous with financial stability and customer engagement, bank branches are now at a crossroads. The rise in digital banking, accelerated by the circumstances surrounding the COVID-19 pandemic, has led to varying perspectives about the long-term relevance of bank branches. However, there’s a resurgence in the physical branch experience, particularly as leading financial institutions pivot to redefine their services and engagement strategies.
The banking industry is no stranger to change, but recent years have introduced complexities that demand attention. Banks are reassessing the value of their physical networks from macroeconomic shifts to evolving consumer expectations. According to RBR Data Services’ 2024 Global Branch Transformation Report, the U.S. is the world’s second-largest market for bank branches. As of the end of 2023, there were approximately 97,000 bank branches in the U.S., highlighting the continued importance of physical banking locations in the overall financial ecosystem.
Want more insights like this? Check out Candescent’s content portal: Illuminating Insights in Digital-First Banking
But What Is Their Future?
Despite earlier trends suggesting an accelerated closure of branches due to the rise in digital banking, the narrative has since shifted. The post-pandemic dust has settled, and now, many financial institutions are reimagining the role of branches with a focus on enhancing customer interactions and integrating advanced technologies.
Leading financial players are not shying away from physical engagement. Instead, they’re embracing it. For instance, Bank of America has made substantial investments to redesign its financial centers. By 2026, the bank plans to establish 165 new locations tailored for personalized service, eliminating traditional teller lines in favor of collaborative meeting spaces with financial specialists. This approach reflects a broader trend where banks understand that modern consumers expect a different kind of interaction—one that is less about transactions and more about relationship-building.
Similarly, Citizens Bank is tapping into the power of community-focused spaces. Its strategy involves ‘rightsizing’ branches into smaller, more welcoming environments that prioritize personalized financial discussions, reinforcing that the human aspect remains paramount even in the digital age.
U.S. Bank exemplifies another innovative approach by embedding digital-first experiences within its physical branches. The integration of digital kiosks and AI-powered assistants into branch operations offers customers streamlined services and enhances the possibility for employees to concentrate on high-value interactions. These strategic investments illustrate that successful banks recognize the necessity of balancing technology and human connection to ensure seamless customer experiences.
The Value of In-Person Engagement
While many consumers have grown accustomed to using digital banking solutions, research indicates in-person engagements are invaluable, particularly when navigating complex financial matters. The emotional connection established during face-to-face interactions cannot be easily replicated through screens.
Telling Stats:
About 15% of consumers surveyed by Candescent have reported visiting a branch in the past month. And over 40% maintain that personal interactions remain essential to their banking experience.
This illustrates that the human element is not merely a sign of traditional banking but a critical differentiator in a competitive market. Consumers want reassurance during uncertain times and with complex tasks, especially when confronted with new processes or unexpected issues. Banks prioritizing this connection ultimately foster stronger loyalty and engender trust, elements central to long-term success.
"Physical branches are also fundamental for deposit gathering, which remains the lifeblood of the bank," said Andrew Short, executive director of product management at Candescent. "Small businesses, for example, still manage a large quantity of cash, which requires visiting a branch to make deposits—often several times per week."
The Evolving Role of the Teller
As banks embrace branch transformation, the traditional roles within them must adapt as well. The teller position is shifting from purely transactional duties to broader, more specialized engagements focused on relationship management. Many banks are either removing traditional teller positions altogether or shifting toward a universal banker model. Branch staff, or universal bankers, are becoming financial advisors, guiding customers through their finances and providing tailored solutions to meet their unique needs. They’re being trained to transact, sell, advise and service customers in the branch.
Interesting Fact:
Tellers are the face of the bank, but they're often the lowest-paid employees managing the highest-regulated interfaces.
This role of the teller is adapting to modern demands. In many instances, universal bankers have the potential to create memorable experiences that reinforce customer loyalty, which increasingly becomes the distinguishing factor for banks in a competitive landscape. A positive in-branch experience can drive higher-value transactions and client loyalty. And reimagining the role of branch and branch staff can help banks achieve those objectives.
Despite the optimistic outlook for reimagining and rightsizing the branch network, banks are not without challenges. Rising operational costs, evolving regulatory landscapes and competition from fintech startups necessitate a delicate balance of innovation and efficiency. Moreover, banks must navigate increasing consumer expectations—and prioritize the need for speed, accuracy and convenience.
As financial institutions work to adapt their services to different demographics and markets, they face the task of addressing varying customer needs while maintaining sustainable operational practices. This adaptability can often seem overwhelming. Therefore, transforming branch experiences within these constraints requires clarity of vision and strategic execution.
For insights into the challenges banks face and the areas to focus on, read Candescent’s white paper.
The Role of Modern Technology
Modern technology plays an essential role in accommodating the evolving branch experience. Banks continue integrating sophisticated technologies into branch operations for enhanced efficiency. Digital solutions, such as mobile applications and kiosks with self-service ATMs or interactive teller machines (ITMs) that allow customers to engage with a banker virtually, can significantly transform customer service in the branch. These technologies create a seamless connection between physical and digital interactions.
However, technology must not solely focus on automation and efficiency; it should also empower employees to engage more deeply with customers. By utilizing advanced tools, branch staff can enhance their service delivery, allowing them to understand customer preferences better and craft personalized solutions.
The marriage of technology and human touch creates a dynamic and versatile branch experience, positioning banks to better serve their customers while remaining competitive.
As banking strategies continue to evolve, the future of branches hinges on their ability to adapt. The question is no longer whether branches are necessary but how they can remain relevant in an increasingly digital world. Banks that embrace this—maintaining the human touch while leveraging technological advancements—will likely be the ones that succeed.
The journey toward redefining the branch experience is not only about physical space. It’s about creating an environment that fosters trust, loyalty and a strong sense of community. By understanding market insights and consumer trends and embedding a holistic approach to customer service, banks can survive and thrive in the evolving banking landscape.
Our increasingly digital world has illuminated a path for banks committed to transforming branch experiences into valuable, modern-day financial hubs. By reimagining these spaces, banks can solidify their positions as crucial partners in their customers’ financial journeys.
