The branch isn’t disappearing – it’s being reinvented to improve customer service
Over the past two decades, the branch network across the European Union has undergone a dramatic transformation. From a peak of approximately 218,000 branches in 2008, that number declined to just over 129,000 by the last years – a reduction of more than 40%.
This shift, driven by digitalization, cost-cutting, and post-crisis consolidation, has changed not only the footprint of bank branches, but also their purpose. These changes have made different impacts in different states. While countries like Latvia and the Netherlands closed up to 90% of their branches, others such as Ireland saw more modest reductions.
Either way, the branch remains relevant – not for routine transactions, but for high-value, trust-based interactions. Why? Because customers still crave human connection – especially during financial milestones.
What do customers really expect from a branch today?
If most of us carry out our basic banking transactions online, for what reasons do we decide to travel to the branch itself? And what do we expect to find when we get there?
- Face-to-face advice for complex needs: Buying a home, starting a business, managing retirement, or navigating financial hardships are deeply personal matters. Customers want guidance from a real person, not just an app
- Phygital flexibility: Customers also want to start a process online and finish it in-person without repeating steps. It’s about “phygital”, the merging of physical and digital experiences. True omnichannel journeys matter more than ever
- Comfortable, confidential spaces: Traditional teller lines aren’t ideal for sensitive financial conversations. Customers need modern, advisory-focused environments
- Empathy and expertise: Not order-taking, but meaningful financial conversations with knowledgeable, trained professionals
Banking is a relationship of trust. Even as digital channels expand, when it comes to major life decisions, most customers still want to look someone in the eye. The banks investing in transforming branches believe that a brilliant app combined with expert face-to-face support will win long-term loyalty.
Lessons from the past, present and future
Even as early as the 1980s, when banks the first launched phone-based account services, customer demand eventually drove the reopening of physical branches. Citibank’s CitiPhone network was global and cutting-edge – but ultimately had to be complemented by a branch presence.
Decades later, even with AI, apps, and automation, the lesson remains: banking is about trust. And trust is still best built face-to-face – especially during moments that matter. Even now, though over 75% of customers say they are open to opening accounts online, only 15% of accounts are opened digitally.
The lesson: people value physical presence when it matters most.
The rise of phygital banking: Today, leading banks are embracing phygital (physical + digital) strategies that combine the convenience of digital with the reassurance of human physical interaction.
- A customer begins a mortgage application online → books a branch meeting via app → finalizes everything in person.
- Queue management systems, appointment booking, e-signatures, and mobile integration reduce waiting times and allow customers to avoid repeating steps.
- Self-service kiosks handle routine transactions so branch staff can focus on complex conversations.
The result? Seamless, uninterrupted experiences that reflect the way customers bank.
Refocusing branch strategy: From transactions to consultations
When almost all transactions can be carried out online, without the need for personal contact, there is a necessary shift in the purpose of the branch. Today, branches should be less about fulfilling transactions and more about enabling transformation and building trust.
Floor plans need to be completely reimagined. Today, banks are looking to devote more space to advisory, educational, and engagement zones, where customers can learn about new products and receive financial consultations on important life decisions. With this in mind, many banks have begun replacing teller counters with collaborative seating that provides opportunity for discussion and education. There is also an increase in digital signage, check-in kiosks, and self-service ATMs as banks look to harness the power of technology to better serve their customers.
The human factor is also evolving over time. Today, banks must empower staff to act as financial consultants, not product pushers. More than ever, customers need to encounter people at the branch capable of offering genuine advice and assistance.
Banks that adapt in this way are not just surviving – they’re thriving.
Types of branches: The future is specialized
The one-size-fits-all model is gone. Instead, banks are designing distinct formats that correspond to their changing needs:
- Flagship branches: Full-service centers in urban hubs focused on premium advisory
- Service branches: Smaller, part-time locations offering scheduled consultations and extended self-service
- Self-service branches: Staff-less, ATM-only points for rural or low-traffic areas
- Future branches: Technology-rich pilots offering smart assistants, immersive demos, and data-driven service trials
Each format supports a specific community need, while optimizing costs and reach.
Case in Point: ING Netherlands closed 90% of its branches. But instead of disappearing, they have redesigned the remaining 10%. The transformed branches have no cash desks or ATMs. Instead, the focus is on advisory appointments. The interiors resemble coffee shops or cozy lounges, making customers feel at ease. As branches were closed, digital service hubs were also launched in cooperation with retail shops to teach customers digital banking.
The takeaway: ING Netherlands successfully separated the transactional from the relational. It digitized the former, and elevated the latter.
Adopting a retail mindset
To succeed in the future, branches need to stop thinking like bankers and start thinking like retailers. The most successful retail environments are built around engagement, discovery, and brand storytelling. From the moment a visitor sees the branch from the street to the moment they walk out the door, every touchpoint should be intentional.
- Create intuitive service zones: There is no excuse for confusion in a modern branch. Customers should immediately understand what tools are available and how to use them
- Use real-time digital content: As well as up-to-date information about general matters, digital content can also be tailored to the individual customer. Someone with an appointment regarding a house loan, for example, can receive information about the different mortgage options available
- Help staff adapt: Banking staff need to move beyond a transactional approach. The smartest banks offer training to teach their people how to greet, guide, and advise like expert retail associates
By taking these steps and building a new form of banking, the branch becomes a brand experience – not just a location. Future-ready branches operate with a consultative, education-first mindset. Successful branches are those where customers walk out smarter than when they walked in. It is essential to:
- Train staff to ask thoughtful questions
- Understand life-stage context
- Offer personalized advice
The result: stronger relationships, increased trust, and long-term customer value.
Branch floor plans that drive results
Think of your branch as a live-action marketing campaign. With smart design, it becomes a 24/7 representation of your brand and service model. To ensure success it makes sense to shape and develop five main space types:
- Self-service – for routine transactions
- Educate – demos, tutorials, onboarding
- Advise – personal finance consultations
- Partner – cross-functional areas or community spaces
- Transact – legacy teller functions, minimized and optimized
These spaces operate in tandem with cutting-edge technology that can be harnessed to provide customers with a rewarding and seamless experience. From ATMs with video banking to real-time feedback kiosks, the technology exists to transform branches. But it’s not about the tech itself, it’s about using it to deliver care, guidance, and efficiency.
The key point here is that each piece of tech must directly serve the needs of the customer. Self-service machines reduce queues, while digital check-ins personalize the visit. In addition, intelligent appointment scheduling adds structure to the bank-customer relationship and enables staff to prepare properly for interactions.
Combined, these factors enable staff to focus on what matters: human connection.
What sales leaders must do
Sales managers are the architects of this transformation, providing a link between the demands of the business and the needs of customers. Your job is to:
- Redesign training for advisory excellence: The more experience someone has of working in front-end retail banking, the more likely it is that they will have a more transaction-based approach. Sales managers need to shift everyone’s mindset towards trusted advice and long-term customer care
- Build daily sales rituals around consultative behaviors: Training is not sufficient, however. It also helps to build up daily good habits that encourage and remind staff of the importance of providing valuable consultation to customers
- Set KPIs for relationships and engagement, not just transactions: This change must be reflected in the targets set for sales staff. This sends a clear message that trust and relationships are highly valued by the company
- Use CRM tools to prepare for personalized, data-informed conversations: Customers now expect customized information. Backed by information from CRM that informs us of the customer’s previous banking history and other useful information, reps can tailor their approach to the individual in front of them
This is no longer about selling – it’s about solving.
Conclusion: From physical presence to strategic value
The digital revolution has instigated one crucial shift in banking: For almost all transactions, it is simply no longer necessary to physically walk into the bank to carry them out. Many aspects of traditional branch operations truly are redundant. But the branch still matters.
The future of branches is not about presence for its own sake. It’s about being present where and when it counts. On a global level, it is clear that customers don’t want banks that are just digital. They want banks that are digitally smart, physically trustworthy, and humanly responsive.
Sales managers must help teams embrace this transformation, not as a challenge, but as a unique opportunity to create deeper, more valuable relationships.
Because in the new world of banking, selling isn’t just about what you offer – it’s how, where, and why you offer it.
Interested in optimizing your branch operations and sales effectiveness? Meet our consulting service coming soon.