GREENSBORO, N.C. — The greatest challenge for banks over the next five years will involve increasing the use of technology while maintaining personal relationships with customers.

Heightened regulation will stymie product innovation, particularly in products such as mortgages, and competition from nonbanks in areas like payments will intensify, Bryan Jordan, chairman, president and chief executive at First Horizon (FHN), told attendees of a Tuesday presentation in Greensboro hosted by the North Carolina Bankers Association.

Technology offers a solution by lowering costs and catering to emerging consumer trends, but it also threatens the foundation of what it means to be a bank. "When you consider commoditization of mortgages and homogenous pricing dictated by regulation … there's added pressure on the banking industry to create a unique and differentiated relationship, particularly when you don't see the customers as often," Jordan said.

The numbers tell the story at First Horizon, he said. The amount of customer business conducted at the $25.5 billion-asset company's branches has fallen by about 3% annually in recent years. Just 55% of its households made a monthly trip to a branch last year, compared to 78% just five years earlier.

Roughly 15% of First Horizon's customers are adopting platforms to bank with their cell phones. And the Memphis, Tenn., company has reduced the number of branches it operates by 17% over the past five years, learning to do more with less locations.

Closing branches "only makes sense when customers are visiting them less often," Jordan said. "It puts pressure on us to have additional technologies and alternative ways of meeting customer needs in a differentiated and easy-to-do-business sort of way."

So First Horizon is making efforts to balance technology and personal relationships, Jordan said. The company is getting ready to pilot a concierge branch call center in Memphis. "We are testing the way we greet the customer all the way to how we meet their needs," added Jordan, who visited the center on Monday to witness role playing among the employees.

"Still, I wonder about the perspective of the people in the financial centers," he said. "What will this mean in terms of the way that they work? It will require a completely different mindset over the long term. So we have to think about how we approach hiring, retaining and motivating people in a world that is changing very, very rapidly."

Hiring qualified workers in an era where bankers are viewed unfavorably also worries Jordan. "I've had a concern for the last three to four years," he told the audience. "The banking industry took a black eye during the financial crisis. Will little kids still be interested in playing banker or lawyer? It is incumbent upon us all to solve that.

Jordan concluded by comparing the battle between banks and nonbanks to a well-documented struggle within the movie rental business. "Is this an inflection point that looks like Blockbuster and Netflix?" he asked. "If so, what do we need to do today to prepare for five to 10 years down the road?"