Branches of Choice: The Future of the Retail Bank Branch

Since nearly the inception of banking, the branch (or its early-days equivalent) was at the center of the banking experience. But today, new technology and consumer expectations mean that the branch is just one touchpoint among many within a customer-centric brand ecosystem.

Customer behavior is changing and the latest research reveals new patterns:  In 2015, mobile surpassed branches for the first time in terms of which platform U.S. customers use to perform their weekly banking. In fact, just 14% of bank transactions occur in a branch, with a majority (53%) being completed online. And when customers do visit a branch, their goals are quite different. Most often, they are looking for personalized support and more in-depth conversations related to sophisticated products. This requires branch employees – of whom there are fewer than ever – to step out from behind their teller windows (increasingly with tablets in hand) and engage their customers.

In response, banks are launching a new range of bank branches and redefining how, when, and where customers can interact. This new range of bank branches has major implications for the future of the industry, and requires a nuanced understanding of customers’ lives and journeys.

The future of the bank branch is really about customer choice, with new branch formats and more complex customer journeys differentiating leading banks from also-rans.


Branches of Choice

The changing landscape of retail banking presents banks with an opportunity to design branches in entirely new ways, and interact with their consumers through more contextual and unique experiences. In an effort to optimize the bank branch, banks are seen embracing a new strategy, which we call Branches of Choice.


Evolution toward Branches of Choice

Branch experiences will be personalized around customer needs.


Bank branches still matter, but there are distinct classes with specific roles. And these discrete classes must ultimately support omnichannel customers and their desires for a seamless blend of digital and physical spaces.

Banks are developing four types of branches, each with separate objectives. The distinct types are:

  • Destination or flagship branch: A large footprint hub in a high-traffic, high-visibility urban location that provides the most immersive, advisory, full-service experience (e.g., the Umpqua Branch in San Francisco, California).
  • Smaller, nano branch: Small footprint (under 1,000 square feet), neighborhood branch with minimal staff and maximized digital self-service functions (e.g., the BMO Studio Branch in Toronto, Canada).
  • Pop-up branch: Small footprint branch either on wheels or easily moved to service a seasonal need or event. Minimal staff and maximized self-service (e.g., PNC’s Seasonal Bank in Atlanta, Georgia).
  • Self-service branch: Tiny footprint kiosk or next-generation ATM with no staff on site, yet full service available through video conferencing (e.g., Bank of America’s Teller Assist ATMs across the United States).

Through combinations of these four formats, banks can ensure that they have addressed the full range of customer needs.


The in-branch customer journey

To plan the right digital experience at the right time and place within the branch, along with considering how it reinforces the brand’s strength, marketers and their bank clients should focus on breaking down the customer journey through the branch into multiple steps. In this example, that customer journey is broken down into eight steps.

Although often neglected, the first three establish crucial first impressions, from the branch’s street view (initiate) to its façade (attract) and entry (engage). This is followed by considering the question that each step of the branch experience must address in order to engage the customer successfully. For example, with the initiate step, what motivates the customer to visit the branch?


Questions for the branch experience to address at each step of the customer journey



Designing the branch of the future in four phases

With these questions building on a deeper understanding of the customer, we can then consider the customer’s emotional needs and how they shift throughout each journey. For example, while a journey could take only minutes, the consumer might shift from motivated to optimistic, followed by intrigued and compelled. Once those needs are established, however, the service blueprint begins to take shape. The branch format can then be considered by looking at how each format uniquely meets customers on their journeys.

Building a service blueprint: Emotional needs


Banks can apply the resulting service blueprints to plan the blending of spaces – digital, physical, and emotional. The extension of a mobile banking app experience into the branch – through geo-fencing or integration with in-branch, digital screens – is a great example. It can also prepare the bank’s Customer Service Manager and Universal Banker for their roles, highlighting the choices that they can offer to delight branch visitors at each phase of the journey.

The four phases of service, along with the experience components associated with each, are:

1. Phase A: Attract & Engage

The Attract & Engage phase invites clients to approach a digital façade, leading them into the space through a physical installation that concludes at a digitally-enhanced customer service area.

2. Phase B: Welcome

The Welcome phase provides support for self-service as well as digitally-assisted servicing – outside the confines of a traditional bank layout. It includes two main components: clienteling tools and education panels.

3. Phase C: Queue

While clients wait for service (the Queue phase), they use a range of their senses, deepening their comfort and engagement with the branch environment and the bank’s brand. Some exemplary experience components include visual exhibitions, responsive lighting, interactive screens, and ambient music or focused audio.

4. Phase D: Serve

The heart of the new banking experience, the Enhanced Banker Workstation and Client Tool, will support the variety of service scenarios whilst maximizing reuse of the space. They represent the Serve phase and integrate with secure wireless technology to allow the banker to work from any workstation. The Client Tool will operate as a secondary screen to the banker workstation, displaying information back to the client as tasks are completed. The Client Tool is networked to the workstation, allowing the client to provide information and selections through the device.


How do you know if your branch ecosystem is right?

Branch customers should feel as if every product, service, and interaction is personal to them. The bank is a space oriented around service. Customers want banking to be accessible, allowing them to feel confident and empowered by their financial choices from every interaction on every channel. While established banks feel weighed down by their portfolios of branches, looking at branches as part of larger ecosystems of consumer interactions can help to relieve that burden.


The Branches of Choice ecosystem


So, who is doing it right today? Best-in-breed branches are focusing on consumer needs, existing because the consumer wants them to and not because the bank requires customer visits. These banks innovate beyond the table stakes of dispensing cash, cashing checks, transfers, and account balance management.



Digital did not kill the branch. It drove the evolution up the value chain to help customers solve for longer-term financial security. Consumers see banks in a different light today – less as austere gatekeepers and more as lifestyle-enablers. Consumers do not expect long waits, they expect to be waited on. The tables are turning.

In designing for Branches of Choice, you must first determine what choices matter to your customers and their emotional needs within the branch journey. This is not a challenge of digitizing the bank branch. This is a challenge of banking in a digital world. Your branch is no longer recognizable as your bank, but instantly recognizable as an expression of your bank’s brand – an expression of a brand consumers want to affiliate with.

To read more about the evolution of retail banking and the consumer journey, along with an in-depth look at the four phases of the Branches of Choice approach, download the full article PDF below.

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Related Keywords
  • Financial Services
  • Disruption
  • Innovation
  • eBusiness & Channel Strategy
  • Business Transformation
  • Innovation
  • Modern Service Delivery