Bank Branches Meet The Future — Banks Remake Locations in Face of Fewer Teller Transactions

by PaymentsJournal 0

With teller transactions becoming less common, banks are reimagining their branches to better meet the needs of the modern customer

When Alan Digrace strolled into Evans Bank’s branch in Lancaster, he was struck by the new look.

A “concierge”-style desk was positioned up front, where an employee greeted customers. The branch had only two teller windows, rather than a series of them. The floor plan featured more open space.

Digrace, who used to work for banks, found the appearance refreshing.

“When you walk in here,” he said, “there’s people around. It’s kind of inviting.”

For banks such as Evans, this is more than a branch makeover. They are changing with the times. Customers are handling an increasing number of basic transactions online, on mobile devices or at ATMs, without stepping inside a branch. FMSI, a firm which studies the financial services industry, says branch transaction volumes have fallen more than 45 percent since 1992. And SNL Financial reports the number of branches nationwide is down 6.3 percent since 2009, a net decline of more than 6,000 locations. Earlier this year, JPMorgan said it would close 300 branches over the next two years, representing 5 percent of its total.

Banks insist branches remain essential to what they do. But they are looking for ways to hold down their real estate expenses, expand their employees’ skills, and make branches more appealing to customers.

So expect new branches – either refurbished or built new – to look different from branches of old, and likely with less space. Some banks are even referring to branches as “financial centers” or “customer centers,” seeing them as meeting places for more-complex transactions.

Recent changes occurring at branches are the result of a new mindset that self-service banking, including next-generation ATM and digital banking capabilities, are driving fundamental changes in the branch channel. These changes, chronicled in recent Mercator Advisory Group Banking Channels research, and will be included in future research as well, include the changing role of branches from being primarily a transaction channel to an education and advice channel. These changes are significant, and will impact all channels, including ATM, digital banking, as well as drive a similar transformation in financial institutions’ call and contact centers.

Overview by Ed O’ Brien, Director, Banking Channels Advisory Service at Mercator Advisory Group

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