33% of US Consumers View Physical Branches as “Essential”
- A major transformation is occurring in the banking industry
- Physical bank branches are still "essential"
- Cash automation strategies create a competitive edge
Forbes.com reports that the banking industry is undergoing a major transformation, as financial institutions strive to meet the quickly evolving needs and preferences of modern customers. For instance, according to a recent survey, 33% of U.S. consumers still view physical bank branches as "essential" for their banking activities, across all age groups.
In a recent YouGov survey commissioned by Diebold Nixdorf, 33% of U.S. consumers reported that branches are essential for conducting their banking activities. These numbers hold true across all age groups and are reflected in Bank of America’s recent decision to open more than 165 new branches by the end of 2026, Chase’s multibillion-dollar investment to open more than 500 branches and hire 3,500 employees by 2027, and PNC pledging to increase branch investment by $500 million to double its planned branch openings to more than 200 across six states.
Finding Balance & Automation Technology
As banks adapt to this new landscape, they must find the right balance between physical and digital channels. As the article states, "An integrated physical-digital approach positions branches as flexible, customer-centric service hubs." This "blended model" allows customers to seamlessly transition between in-person and online banking.
Financial institutions that stick with outdated legacy systems will find themselves flatfooted when it comes to meeting customer expectations. If you've ever rented a car and couldn't connect your phone to Bluetooth or CarPlay, you know how frustrating it can be to feel like you're taking a step back technologically. Banking should be no different, and those who prioritize blended solutions will find themselves attracting customers who couldn't get what they wanted from someone else. Artificial intelligence also holds great promise for enhancing branch operations and customer experiences, though banks must approach it cautiously. The article notes that "AI should complement human service, not replace it."
Finally, the role of automation technology cannot be overlooked. By reducing the operational burden, branches can focus more on building customer relationships that, as we've previously pointed out, encourage substantial longevity.
Will the Future of Branches Include Checks?
As we noted last year, there was evidence of bank branches making a comeback, with a related post noting that bank branches will see a transformation, moving towards an "experience store" vs a traditional bank branch.
With this in mind, checks will continue to be a major payment channel. And, as we know, branches are a major deposit channel for checks -- whether inside at the teller or via the ATMs at the branch location. Banks need to continue their investment in checks automation, streamlining the process to ensuring that customers are able to write and deposit checks.
If FIs continue to utilize outdated systems, they will indeed be "flatfooted when it comes to meeting customer expectations." -- pushing themselves even further behind other FIs.