Branch of the Future Will Still Be a Branch

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In a recent conversation with senior managers at banks, we joked about how many iterations of the "branch of the future" we have seen over the years. Along the way, some have preached that the branch of the future wasn't going to be a branch at all.

A few decades ago, the branch of the future was going to be an ATM and a telephone. ATMs and telephone banking were going to transform our industry significantly. In fact, they did.

Later, some believed our home computers and online banking would forever alter the way customers interact with banks. Sure enough, they did.

More recently, smartphones, cloud computing and apps were going to make banking anywhere and anytime a reality for customers, and therefore, reduce foot traffic at our branches. And they certainly have.

Evolving technology continues to influence customer preferences and behaviors. From big bank to community bank, customers now have more banking options than any time in history.

Yet, convenient access to a physical bank branch remains as high on most customers' lists of why they choose a bank as ever. For all of the media attention whenever a bank strategically closes a few branches, the total number of branches in America has been remarkably stable. Further, the investments being made across the industry in remodeling and retooling existing branches are underappreciated. Banks' commitment to branches is reflected in more than the building of new facilities.

To borrow Al Gore's line, that is an "inconvenient truth" to the folks swearing up and down that branches are an annoying burden. Sure, we are told repeatedly of everything customers can do without ever visiting a branch. However, there is an important difference between what customers can do and what customers prefer to do.

There is no arguing that many of the most basic branch transactions of the past are now handled outside of branches. Customers increasingly accept that the most basic and rote interactions between them and their banks are more easily handled in a self-service manner. This means fewer trips to branches for menial tasks. That is a good thing.

However, the dynamic makes individual branch visits more important, not less. In fact, the availability of a physical branch may matter more than ever in a technology-heavy, impersonal banking world.

There are few elements of our lives more personal, or of greater importance to us, than our finances. We humans want as many touch points and as much access to the company and people we trust with our money as possible. Customers do not really want physical access to branches. They want physical access to bankers. Branches just happen to be where we keep them.

My wife and I recently made a rare branch visit together to sign paperwork. About 10 seconds into our conversation with a teller, another teller leaned over to tell my wife how much she liked what she was wearing. I smiled and realized they could now make us wait half the day and my wife would still love this crew.

During the visit, the branch staffer we were talking to was not sure of which forms she needed to print for us to sign. She apologized and called over to a co-worker who was working the drive-up window. While waiting for him, she offered us coffee, made small talk about the weather, recent events and our summer plans.

She made sure we didn't stand there feeling ignored. I was impressed by the teams' ability to make us feel like a priority instead of a chore to be handled.

The entire visit took about 15 minutes and was as nice a service experience as we've had in ages. We were not three steps out of the door when my wife said, "I think I have a new favorite bank."

She wasn't won over by the decor or marketing elements or ATMs. Her newfound preference for that bank was driven by having been made to feel appreciated and respected by good people.

That strikes a primal chord for bank customers. We are wired to want to associate with people we trust will reciprocate goodwill.

The paper processing and transactional factory aspects of branches are going away. Those job duties and the total space needed to conduct them aren't as central to a bank's mission any more.

In an increasingly commoditized industry, however, the sales, service and problem resolution roles of bankers – and branches – are more important than ever.

Dave Martin is the founder of the retail bank performance company bankmechanics. He can be reached at

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