Home Banking Make more room in branches for subject-matter experts

Make more room in branches for subject-matter experts


For nearly a year, I have walked almost every day through the mile-square city of Hoboken, N.J., seeing rapid change but one constant since the pandemic lockdown started: a sign outside my local bank branch that reads, “This Financial Center has been temporarily closed. Please visit one of our neighboring ATMs or utilize Online and Mobile Banking, all of which are available 24 hours a day, seven days a week.”

Inside that branch remains my family’s safe deposit box, and the fact that we’re required to make a special appointment to retrieve the contents. This process for something so simple is an unusual feeling, yet comforting to know we safely have an option to access the box.

Since March, we have only needed to access a physical branch once. This required my husband to drive to the neighboring town’s bank branch to get a cashier’s check. We love using the bank’s mobile app. And interactions with our financial advisor, who also works for the same bank, have mostly been on the phone or via email.

So what would it take for this branch to re-open and have a raison d’être in the post-vaccine world? After all, banks can get significant cost savings by permanently shutting down some branches like the one in our neighborhood.

According to a recent report, a bank with 100 branches and 250 ATMs — with an average daily deposit/withdrawal volume of 165 branch and 65 ATM transactions — could save about $5 million annually if it converted 20% of those branch/ATM transactions to its mobile channel.

Throughout the pandemic, there’s been an increased adoption of digital technologies while the need to go to a physical branch for routine banking needs has decreased significantly. However, customers will remain reliant on going into physical branches for things that need human interaction, like discussing complex regulatory transactions for home refinancing with an expert, or an advisor walking them through financial planning.

Most U.S. adults (78%) agree that they could still benefit from advice and answers to everyday financial questions from a professional despite what they already know about personal finance, according to a National Foundation for Credit Counseling survey. Additionally, if they were having financial problems related to debt, one-quarter of adults (25%), or over 62 million Americans, indicate they would reach out to a professional nonprofit credit counseling agency for assistance, survey results found.

This all points to the need to banks to reinvent their branches to create enhanced value for their customers by offering personalized advice. How about transforming these abandoned branches into financial literacy and digital tutoring hubs, creating the consumer banking variant of an Apple Genius Bar?

Customers could walk into a branch to seek expert guidance, not only for their banking needs but also to learn how best to utilize the features on their mobile app or the bank’s website. These digital tutorials could be scheduled in person or self-paced with touch screens or motion sensors within designated areas of the branch. All of these features are meant for making digital banking more accessible to individuals of all ages and demographics.

Also, the enhanced adoption of open-banking standards creates the possibility for a future physical branch to become a financial hub that’s shared across multiple financial institutions. In this model, the banks would be able to share the physical infrastructure and customer service costs, achieving a better return on investment while not compromising on the benefits of in-person service to consumers.

A bank choosing to keep its branches exclusive could also use its partner ecosystem to offer the whole gamut of its customers’ financial needs. The branch could become a one-stop shop to meet an investment advisor, a mortgage loan specialist, an insurance agent, a tax consultant, an estate lawyer or a notary, among others. The branch could also host pop-ups where fintechs that are part of the bank’s platform offerings could come in periodically to have an in-person interaction with their consumers, get real-time feedback on their offerings, etc.

Customers also see a bank as a secure location for cash transactions beyond an ATM’s limit and accessing a safety deposit locker. Banks could charge a premium for these specialized services to get a return on investment in their physical spaces.

Bank branches will continue to have a role to play. But the look, feel and experience of a traditional branch and services offered inside those four walls will have to change significantly for branches to stay relevant.

In addition to evolving business models into broader digital platforms, financial services firms that can transform their physical consumer interactions will gain a strategic advantage and emerge stronger in the post-coronavirus pandemic world.

For now, in the midst of a pandemic and with my neighborhood branch locked in appointment-only for the foreseeable future, we must all remember to be patient and plan ahead. Which reminds me to schedule that appointment to access my safe deposit box.