Live From the Forum: TD Bank’s Steve Turley on Branch Banking’s Next Phase and Attracting Gen Z Customers

Steve Turley, head of retail growth and transformation at TD Bank, discusses how branches are evolving to meet changing customer needs, balancing digital innovation with personal service, and strategies for branch transformation in the digital era.

As digital banking continues to reshape financial services many industry observers have questioned the future of physical bank branches. However, recent research and customer behavior suggest that branches still play a crucial role in the banking ecosystem. Live from The Financial Brand Forum 2024 in conversation with host Jim Marous for the Banking Transformed podcast, Steve Turley, head of retail growth and transformation at TD Bank, spoke about the bank’s approach to branch banking’s next phase — and the many challenges facing retail banking in the digital age.

The Evolving Role of Bank Branches

Q: What were some of the surprises you saw in your research about branch usage?

Steve Turley: For us, the research that we did around consumers coming in and visiting branches found that 84% of folks had come in over the past year to visit a branch, and around a third had been there five or more times. Even 40% of folks indicated that location, which over time has maybe dissipated a bit in terms of that, that kind of primary branch choice remains that leading factor in how they go in and select a branch, which is something that maybe you might not get from perhaps the financial coverage or what you’re reading in some of the trade publications.

This high percentage of branch usage highlights the continued importance of physical locations in the banking ecosystem despite the growth of digital channels.

Q: What did you find customers come into branches for nowadays?

Turley: When you think about it, if you go a few years back to the pandemic and into COVID, we had a dip in folks coming into the store and into the branch, and almost all of those folks came back. Up to 90% of our customers who had been using the store prior came back into the store.

But they came back in a different way. They came back; if you were coming in every day, maybe you’re coming in once a week. If you’re coming in once a week, maybe you’re coming in once a month. However, in doing that, the importance of those individual interactions went up because now, I don’t have 30, 15, or 12 store interactions over the course of the year. I might have one or two or three, so I have to nail those interactions if I’m a colleague in the store.

People are really coming in for those advice-based conversations, those planning conversations, retirement conversations, or something broke or something messed up, and I need you to fix it. And so, those interactions just become that much more important. They also become longer.

This shift in customer behavior underscores the need for branches to focus on high-value, complex interactions rather than routine transactions.

Empowering Employees in the Modern Branch

Q: How do you empower employees to handle complex customer inquiries beyond traditional transactions?

Turley: You can’t be an expert in something that you don’t use. And so, it is critical as we’ve thought about it, we’ve prioritized training our colleagues, but getting our colleagues familiar with the systems that our customers use with our mobile app and not just in terms of doing kind of a web-based training, but you are the user, and you are navigating this for your own banking and your own financial situation.

There’s always going to be those one-and-done things that a colleague is going to come in and just be able to do for a customer. But the real power is, “Alright, this is a recurring issue. Let me go in and let me show you how to do it because I know how to do this, and I’m going to not only resolve this for you now, but I’m going to teach you how to do it so it doesn’t come up later.”

This approach to employee training emphasizes the importance of hands-on experience with digital tools, enabling staff to better assist customers with their digital banking needs.

Q: How important is it for TD to democratize data down to the branch level?

Turley: That’s where we’ve prioritized through CRM and Salesforce, getting the insights and the information consistently across channels but out to that end user. So, they’re sitting there with a customer; they’ve got all the information sitting right there at their fingertips.

They’re able to understand how you’ve interacted with all our channels and just understand that by the time somebody comes into the store having tried other areas, this is a critical point in the relationship. So, we’re giving them all the tools that they need to resolve issues.

By providing branch employees with comprehensive customer data, TD Bank aims to enhance the quality of interactions and improve problem-solving capabilities.

Dig deeper:

Engaging Gen Z in Branch Banking

Q: How do you prepare for the dynamic where Gen Z consumers might want branch services for advice and counseling?

Turley: When I think about Gen Z and some of the issues and challenges that they’re battling, there’s almost too much information coming at them. They have so many ways to assimilate information, but it really comes back to what you can trust.

And I often think, we’re not really in the banking business; we’re in the trust business. And it is about building that relationship. To your point, there is still a significant number of Gen Zs that we’re seeing that want to come into a branch, want to sit down and have that advice related conversation because they get so much information coming in. They want to know what I can zero in on. What can I trust for my future?

This insight highlights the importance of branches as trusted spaces for financial advice, even for digitally native generations.

Branch Design and Transformation Strategies

Q: What are you looking for today in branch design? How has your branch changed over the last five years?

Turley: Where we’re going now is more around that conversation, sitting down, and having that longer interaction around planning. And so, where we’re going is really around setting up more private space, putting more offices in place, putting specialized salespeople, wealth, small business, what have you into the store, and clearly branding that.

Setting up a more casual kind of space where folks can sit down and have a quick conversation like we are having right here. And really, it is about setting us up for the types of interactions that we’re going to have now and going forward, as opposed to the interactions that maybe we had a few decades ago.

We’re renovating hundreds of our stores. We started last year, hit over 50 of them. We’ve got another 100 or so on tap this year. But we are working within our own footprints and really looking at spaces where we want to double down, and we see some the opportunities to go a little deeper and have some deeper conversations with our customers.

This transformation strategy reflects the shift from transaction-focused branches to advice and consultation-centered spaces.

Q: How do you handle the closing of branches differently today compared to in the past?

Turley: Star closures are something that we take very seriously. And with all the gravity just given the potential impact to the community, to our colleagues, to our customers, and really, it is more about some of the themes that we’ve hit on.

You think about the gravity model. If I’m going to travel to a place once a day versus once a month, I’m willing to do a longer drive or a longer walk in an urban area to something that I’m only coming to once a month.

And so, it is more about that consolidation where I maybe have four branches going into three or three stores going into two. And having an opportunity to really double down on the locations that are still left.

This approach to branch consolidation demonstrates a thoughtful strategy that considers changing customer behavior and the need for efficiency.

The Future of Branch Banking at TD and Industry-Wide

Q: Looking to the future, do you see more branches, fewer branches, or reconfigured branches at TD Bank and in the industry overall?

Turley: If you think about the industry, you know, we’ve probably seen a 3 or 4% decline in branches per year if you go back over the last five, six years. TD, we’ve been below that certainly on a growth basis, but we’ve also been opening during that time.

And we feel like we have a significant opportunity to continue to fill in some of the markets, particularly in the southeast, where our networks are a bit thinner and there’s some exciting growth opportunities. But I would say, we’ve kind of slowly tailed down over the course of years. I don’t know if that’s going to change anytime soon on a net basis.

But where we are going to continue to invest is really in the stores that are there, continuing to reconfigure, to renovate, to set up those private spaces for conversations and really double down on several hundred of our store locations.

This outlook suggests a balanced approach to branch strategy, focusing on strategic growth in underserved markets while optimizing existing locations.

Experimentation and Innovation in Retail Banking

Q: What’s your strategy for experimentation with new forms of service or features in retail branches?

Turley: What we’ve done at TD is we’ve set up a live innovation lab. So, we took a store where we had 6,000 square feet. It was cavernous, kind of cut in half. One side may remain a more modern-looking store, and the other side may be a live lab.

And we’re able to sort of close it off, open it up but what we’re able to do is pull customers aside where we have a new product, let’s say something that we want to test. We’re testing the augmented reality headsets that I mentioned earlier in the space coming up.

But not everybody’s going to have a live lab. I think the idea though is the more you can get some of this in front of your customers, in front of your colleagues, they’re going to be able to tell you, “Alright, this resonates, this doesn’t resonate.”

And doing it, kind of in that live flow is better than maybe being in some warehouse or back office somewhere.

This approach to innovation demonstrates TD Bank’s commitment to testing new ideas in real-world settings, ensuring that new features and services resonate with customers before widespread implementation.

Justin Estes is an award-winning writer, strategist, and financial marketing expert with expertise in banking, investments, and fintech. His clients include the NYSE, Franklin Templeton, Credit Karma, Citi and, UBS, and his work has appeared in Forbes, Barrons and ThinkAdvisor as well as The Financial Brand.

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