Did you know that one in 20 Americans upgrade their mobile phone every six months? One in 10 will buy a new mobile phone every year, while over half wait two or three years. Community financial institutions (CFIs) are unlikely to upgrade their branches that often, but recent shifts in consumer behavior have prompted many of them to embark on projects to align their branches with their customers’ changing needs.According to Statista’s Consumer Insights, 63% of bank account holders in the US used their mobile phone or tablet to conduct transactions in Q4 2024. However, 45% still process certain transactions in-branch. This matches what many institutions are seeing: customers are increasingly performing simple tasks online, but make a beeline for the branch when they have a problem or a need for more complex transactions. To adapt, many CFIs are rethinking their branch strategies in four ways.1. Selecting Strategic LocationsTraditionally, institutions have chosen a branch site based on simple demographics. With more pressure to optimize branch performance, leaders are increasingly using more sophisticated methods to determine where and how to spend their dollars. This includes leveraging data — on customer demographics and behavior, competitor offerings and market saturation, traffic and accessibility, and local economics — to guide decision making and ensure that branches are strategically located to meet market demand.
- Location intelligence has been instrumental in GECU’s expansion strategy. A CFI with $4.4B in assets based in NM and TX, GECU uses location intelligence to inform decisions on new branch construction, enhancements, and drive-up locations. This has resulted in a 54.7% membership growth, and the institution has achieved a 100% in-branch self-service adoption rate.
2. Integrating Digital into the BranchIntegrating technology into the branch can be transformative — both in enhancing the customer experience and in driving efficiencies. Tools such as self-service ATMs, video banking capabilities, and interactive teller machines (ITMs) enable customers to perform simple tasks in the branch, while still having access to branch employees for support with more complex transactions. Moreover, armed with data, insights, and a tablet, employees can deliver more tailored solutions in their interactions with customers.
- As it continues to expand its FL presence, Amerant Bank, a CFI with $10.2B in assets, has focused on creating state-of-the-art branches featuring digital signage, an LED wall, interactive kiosks, tablet stations, and teller cash recyclers.
- Veritex Community Bank, a TX-based financial institution with $12.3B in assets, digitized its in-branch account opening process and unlocked huge savings. By doing so, Veritex reduced the time taken to open a consumer account from 87 minutes to 7 minutes, increased in-branch account opening by 77% YoY, and benefitted from increased referrals and five-star Google reviews.
3. Shifting to an Advisory ModelAs customers increasingly perform simple tasks digitally, most institutions are positioning their branches to provide advice and expertise on more complex matters, such as financial planning, wealth management, lending services, and small business banking solutions. Key to this model are highly trained employees who can cater to a wide range of customer needs, and a branch layout that facilitates both casual and private conversations while putting customers at ease.
- Wilmington Savings Fund Society (WSFS Bank), an institution with $20.8B in assets, firmly believes in the importance of the branch as a space for customers to find advice, support, and willing listeners. Branches are located within a 10-minute drive of where most customers live. WSFS has invested in staff training, redesigned its branches around friendly open spaces, and placed mortgage lenders and wealth managers in-branch. With the institution reporting a 4% increase in deposits in 2024, EVP and chief consumer banking officer Shari Kruzinski says this strategy has paid off: “Customers’ balances are higher than average and their tenure with the bank is longer than average.”
4. Creating Inviting Community SpacesAlongside the shift to more consultative branches, CFIs are redesigning their spaces to ensure customers feel welcome and encourage relationship building. Many different innovative concepts can be seen across the country, ranging from café-style interiors — bright spaces, hardwood flooring, and pendant lights — to bold colors, soft furnishings, and open, flexible spaces.
- OH-based F&M Bank, a CFI with $3.3B in assets, has recently refreshed many of its branches and expanded into new markets. Each branch now features a “market wall” that ties back to its community. For instance, the refurbished Auburn, IN branch created a wall featuring pictures of the local car plant that closed in the 1930s. “Everybody in town can identify with the plant and the impact it had on the community,” says Lars Eller, president and CEO.
- Williamstown Bank, a CFI with $226MM in assets operating in WV, chose to differentiate itself from the competition by introducing a donation-based coffee shop in two of its branches. The Giving Cup thanks its customers for any donation with one or more beverages depending on the donation amount, and the funds collected go to local beneficiaries. So far, the CFI has raised $57K and initiated many conversations with existing and potential customers.
With the continued uptake of digital banking, many CFIs are rethinking the role of the branch to maximize relationship building and create a frictionless customer experience. This includes leveraging location intelligence to make strategic decisions, integrating technology into the branch, shifting to an advisory model, and creating inviting community spaces.
