Bank Leaders Envision the Future of Physical Branches

The term "Branch of the Future" conjures varied futuristic images, but Stephen Griffin, SVP of Branch and ATM Distribution at Regions Bank prefers a more immediate perspective. "We really should be asking, 'What's the branch of next week?'" he said at BankSpaces. When he started at Regions in 2014, until the time he opened his first new location in 2017, he’d changed its design 3 or 4 times, he said.

This rapid evolution makes sense. Customer needs and expectations are changing fast, and retail banking leaders are trying to keep up. Banking, an industry notoriously slow to change, has had to accelerate its game to provide the retail experiences customers now expect.

Griffin, along with Shona Callahan, SVP of Workplace & Retail Design Standards at Truist, and Dan Hoke, SVP and Group Head of Retail Branch Optimization and ATM Banking at U.S. Bank, shared their visions for bank branches in 2034. The discussion, moderated by Brian McEvoy of Webster Five, revealed several key predictions:

1. Transaction-focused branches will become obsolete.
2. Branches will integrate more into their communities, evolving to advice and community hubs.
3. AI will be deeply integrated into the retail banking experience.

Could a self-service banking model have robots greeting customers? It’s a possibility, some panelists said. While this may seem far-fetched, it's worth remembering that ATMs were once considered a passing fad. Now, there are over 450,000 in the U.S.

Adaptive Spaces, Agile Services

The future branch will need to be adaptable. Griffin stressed, "As you look to build toward the future, you've got to be able to take what you have today and transform it into what you need tomorrow. We have to be able to design branches that enable us to change in the future."

Hoke noted that adapting branch designs to changing customers’ needs will continue to be important when it comes to implementation: “The branch choreography and change management and adoption accompanying those changes are just as important as the design changes.” 

The panelists agreed that agility would be crucial. "The biggest challenge for the next 10 years is going to be speed and adapting to customer needs," Hoke said.  Banks are rapidly adapting to meet the expectations of their clients, and -those that are nimble while providing compelling products and quality service will be able to attract clients at a higher rate.

Tech Integration, Other Retailer Inspiration

The panelists agreed that automation and AI will play significant roles in how the branch of the future will operate, but the focus should be on enhancing rather than replacing human interaction. This will require seamless integration of digital and physical channels for a true omnichannel experience.

Despite increasing digitization, panelists emphasized that human interaction will remain crucial. Callahan highlighted the importance of personalized service, especially for regional banks. "We can't be everything to everybody," she said. "We have to focus on certain aspects of the client we want to hone in on."

Callahan envisions Truist as a "financial advice bank." She explained, "In 10 years, I see more classes taking place lines of people doing transactions. That's when we know that we are truly becoming a resource for the community."

Griffin echoed this sentiment: "You better be ready to be that place where people come in for advice and guidance be hiring the right people and putting them in place to do what the customer wants."

Data-driven decision-making will be crucial in shaping the branch of the future. Callahan used Target as an example of a retailer that places customer experience front and center. 

"I'm addicted to shopping at Target. I get on my app, choose what I want and then say I'm on my way. Then I get there, tell them where I'm parked and they bring me my groceries,” she said. “My hope is that we can do something similar with banking, where you choose on an app beforehand what you need, and when you get to the branch, your cash, or whatever you need is waiting for you."

As Griffin aptly put it, "We are followers. Whatever new, cool things you see happening in retail, we are sure to follow them shortly." 

Future Trends

Several other trends emerged from the discussion:

1. Decline of Cash:  The panelists noted that they expect ATM transactions to continue to decrease gradually – along with currency and cash, and that operating conditions will increase in complexity due to digital currency. 
2. Demographic-Driven Design: The panelists agreed wealth demographics would significantly influence branch design and positioning. A self-service model might suit a middle-class neighborhood or urban setting, while a concierge, full-service model could be exclusive for wealth management.
3. Mitigating Financial Anxiety: The panelists also noted a high degree of financial anxiety in the U.S., suggesting that branch locations in the future will continue to need to address this through in-person services and branch designs.

Despite the bevy of changes on the horizon, Hoke noted that branches will remain relevant: “We’ll continue to need financial centers to meet with customers. There’s an ongoing desire to have a place for financial conversations.”   

Bank branches will undergo significant transformations over the next decade. The successful branch of the future will likely be a hybrid space that combines digital convenience with personalized human expertise. It will be adaptable, community-focused, and seamlessly integrated with other banking channels.