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Bank Customer Experience Summit

What's the future for bank branches?

The future of bank branches will be interesting, according to Stephen K Griffin, SVP and director of the Retail Distribution Planning Group at Regions Bank. Griffin shared his insights in an opening keynote at the Bank Customer Experience Summit held in Chicago from Aug. 31 to Sept 1.

What's the future for bank branches?Photo provided by Networld Media Group


| by Bradley Cooper — Editor, ATM Marketplace

Bank branches have taken a beating these past few years. With COVID-19 forcing shutdowns of branches in 2020 and changing customer expectations causing permanent shutdowns, many analysts have asked the question, "What is the future for branches?"

The future of branches will be interesting, as Stephen K Griffin, SVP and director of the Retail Distribution Planning Group at Regions Bank, shared during an opening keynote at the Bank Customer Experience Summit, held in Chicago from Aug. 31 to Sept 1.

COVID-19

During COVID-19, Griffin said banks found out whether their "disaster recovery programs worked really fast." Luckily for Regions, its program worked particularly well and the bank was able to adjust to remote work for its back office employees while adding necessary precautious for front-end employees.

Following this, Regions Bank promoted its appointments feature so that customers who needed to talk to someone in the branch visit. The bank also added plexiglass, signs and social distancing guidelines. Griffin said Region's goal was to make customers feel safe and to promote its services so customers knew the branch may be closed but the bank was open.

"The use (of appointments) went up 72% in first month because we promoted it," Griffin said. In addition, staff covered multiple locations.

Despite these efforts, Regions did experience several drops in transactions. For example, in-branch transactions dropped by 25% and ATM sales by 2%. Griffin said in 2020 banks closed 3,324 branches, and saw a 38% increase in net reduction in 2021, according to data from FDIC.

Branches

While COVID certainly impacted these closures, Griffin said banks were already going that way prior to COVID.

Although closing branches is a general trend in banking, Griffin said, "You can't close your way to prosperity."

So, is the branch dead? Griffin doesn't think so, but it does need to change. While traditionally branches have been used for transactions, this role has declined significantly and what customers want has changed.

"Many still say they will use it for guidance," Griffin said.

In particular 58% of 18-34 year olds and 54% of those in the 45-54 age bracket in 2021 said they would go to the branch for advice, he noted. Only 17.3% said they would use digital only in 2022. Griffin argues this fact is due to the fact that digital onboarding has issues and has high attrition rates.

Adjusting the branch's role

So how do branches make this adjustment from transactional centers to one of helping customers with financial advice? Regions in particular has adjusted its branches for this purpose.

"We laid out our branch with universal bankers who can do anything we need them to do," Griffin said. "They can go through a transaction, loan any need they have. Take them to any room they need."

By adopting universal bankers, Griffin said banks can create a good banking family and a career path for employees as they can move around various roles within the bank.

On the drive-thru side, Regions automated its drive-thru with ATMs, since customers can accomplish 95% of many tasks they need with an ATM that would normally be addressed by a banker.

What's on the horizon?

When looking at what's next for branches, Griffin said branches will continue to close, but the overall branch network will become more strategic. To keep up with this trend, banks will need to invest heavily into putting advice and guidance front and center with branches and invest in associates who are empowered to engage customers, Griffin said.

Banks will also need to continue to invest into digital as well so customers can try out bank services, so that customers can have a robust "phygital" experience with both the physical branch and digital apps.

"What happened during COVID is that we realized these two channels(digital and physical) need each other," Griffin said.

One practical way this could work would be informing associates on what customer's needs are on the digital level so they can utilize that information to help them with both current and future needs.

"You have to make sure your associates have the tools they need to succeed," Griffin said.

At the end of the day, Griffin said, "Customers want the best of both worlds. They want the branch." However these branches will only work as long as their design and employees "meet the customer's needs."


Bradley Cooper

Bradley Cooper is the editor of ATM Marketplace and was previously the editor of Digital Signage Today. His background is in information technology, advertising, and writing.

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