Strategies, Best Practices and Thought Leadership

Branch Expansion: A Nationwide Trend

Across the entire country, we are seeing physical branch expansion efforts increase. While digital is still critical, banks and credit unions are beginning to experience longer lines and a greater need for physical locations again. More and more, financial institutions are finding that customers want to interact with the bank when, where and how they want, and that some consumers would still rather interact face-to-face in the branch, especially when dealing with complex financial transactions, according to Kiran Analytics.

But, despite the debate between digital and physical banking, one thing is certain – banks and credit unions must stay focused on enhancing the consumer experience. Financial institutions focused on better serving customers and members by improving engagement will ultimately support their overall growth strategy.

Digital Banking Vs. Branch Banking

As financial institutions continue to debate whether to be digital-centric or branch-focused, some see branches as unnecessary. However, in actuality, many consumers still find themselves frequenting their branch location. The Financial Brand reported that overall 61 percent of U.S. consumers visited a banking branch within the last three months.

Across generations of people – from Baby Boomers to Generation Z – there is a continued want and need for bank and credit union branches. While some people cite the ease and convenience of online and digital banking as their primary go-to for their financial needs, others enjoy the face-to-face interactions that come with the branch experience.

In fact, McKinsey and Company notes, “As banks continue to make progress in digitizing the customer experience, they must also remember that omni-channel includes the critical human side of the equation.” Embracing this omni-channel environment is necessary to the success of financial institutions, meaning financial institutions can’t ignore the importance of physical branch locations.

They aren’t ignoring it – banks and credit unions across the nation are planning branch openings and expanding the footprint of their physical locations.

Big Banks Announce Branch Expansions

Even though consumers are increasingly choosing to interact with friends and family digitally, the majority of U.S. adults, 55 percent, prefer in-person interactions with their bank when a conversation is needed, according to a report from Celent. These numbers haven’t been lost on banks and credit unions, either.

For example, Chase Bank announced major branch expansions last year. Chase expected to “open up to 90 new branches in new markets and hire up to 700 employees by the end of the year, giving more customers access to its retail and business banking services.”

And, the bank isn’t planning to stop there – the new branches are modern in design with a focus on customer engagement, including features like coffee bars, open spaces, meeting rooms and financial wellness chats. It’s engaging features like these that financial institutions are adding into their new locations to grab people’s attention and draw them in.

Engaging Customers and Members

Branches are critical to the success of banks and credit unions and are important to guaranteeing a great consumer experience for financial institutions, promoting heightened engagement with members and customers.

Many financial institutions are using branches as an engagement tool to reach people, interact with them and provide meaningful and helpful financial chats, specifically for some of their bigger banking needs. Insights explains, “Contrary to expectations, branches continue to be the strongest engagement tool for banks. The importance of branches becomes clear when financial institutions understand that transaction is not the same as engagement, and that customers expect a great in-person experience for many services.”

Utilizing branches as a tool to engage with members and customers helps create a personal experience with the consumer which ultimately drives new and existing consumers to the financial institution, strategically growing their overall business and earning their loyalty.

 The Important Role of Branch Expansion

Digital will still be a big part of the future of financial institutions but discounting the need for branches would be a big mistake for banks and credit unions looking to grow their business. Financial institutions must take note of the institutions integrating their digital and branch banking experiences to focus on what’s most important – the consumer experience.

Consumers overwhelming want a seamless, omni-channel experience that provides both digital and branch options, and financial institutions need to utilize their best engagement tool – well-designed, physical branches – to acquire and retain customers and members.

 

Topics: Market Trends, Marketing

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