Ever since the number of bank branches in the United States reached its peak at about 93,000 in 2009, the predictions surrounding their role in the future of banking have varied widely. 

On paper, this debate could seem like a bad omen for banks, but with more digging into the numbers, you will quickly find this trend is being met by a dramatic shift in how ATMs and other self-service kiosks are stepping up to meet customer needs in new ways. 

From their perspective, banks have also begun to see their own operational benefits with this increased reliance on cash automation and payment and transaction technologies, including the role that customer service staff play and in their ability to provide a more personalized experience. 

So what do these shifting customer preferences and other changes in how banks serve customers through their physical locations mean for branch transformation in the years ahead?

Restructuring the Role of the Branch

As in-person teller-based transactions decline and customers utilize digital devices to handle more and more of their banking functions, banks are continuing to expand the role ATMs, ITMs, and kiosks play in driving sales and delivering personalized customer service. This has also allowed banks to shift the overall layout, design, and role of their branches.

This provides customers with the best of both worlds; opportunities to use mobile and self-service banking for less complex banking needs while still having the option to visit branches for specialized services. This has played out in recent studies where, despite the introduction of branchless banking options, 94 percent of customers still use a bank with physical branches and nearly half (44%) prefer to utilize customer service staff in-person for their banking needs.

Reducing Costs and Increasing Efficiency

These changes in how and where banking staff spends their time and how customers use mobile apps and ATMs are also beginning to positively affect banks’ bottom lines. 

For example, when customers have access to ATMs to handle more routine transactions—like deposits, transfers, and withdrawals—branch employees can instead focus on educating customers about new services and products. These shared responsibilities can also help as the labor market continues to fluctuate and banks struggle to hire and retain staff.

Similarly, there are also growing signs that point to the role that artificial intelligence and machine learning will play in a branch's back-office processes, where computers can help with a range of administrative tasks. One bank found that they can reduce the amount of time to process a loan application in half by using technology to consolidate, review, and check the submitted documentation.

When combined with the time saved by implementing self-service kiosks, ATMs, smart safes, and cash recyclers, branch employees can continue to increase the amount of time they can spend on direct customer service and sales.

Changing the Customer Experience

Even before the global health pandemic, customers were becoming more comfortable with using mobile and online banking. According to one study, two-thirds (67 percent) of retail banking customers turned toward their bank’s mobile app in the past year with 31 percent stating that they were able to successfully use the digital platform to resolve an issue.

Mobile apps and ATMs can also serve as more than just transactional devices. In fact, many banks are using them to provide personalized marketing to customers. One industry expert noted that, whether they are at banking locations or in other high-traffic areas, ATMs are “an important part of the sales funnel that helps to efficiently acquire and retain customers.”

Similarly, other banks have begun to integrate other features into their mobile apps and ATMs, such as financial literacy tools, real-time alerts, and account management as a way to increase engagement and build satisfaction with their bank.

Looking Ahead

Despite all of the noise, bank branches will not disappear overnight. Instead, banks will take steps to transform their branches from quick stops for basic financial transactions to hubs of knowledge and service for customers, leaving your local branch looking much different. 

This means that banks need to not only understand the role self-service technology plays in the larger customer service model but also use this as an opportunity to reshape their operations and become more nimble for the changes ahead.

Want to learn more about how your bank can lay the foundation for tomorrow’s innovations while exceeding customer expectations today? Then we recommend you take a look at our e-book, Scaling Your Business with an Experienced Service and Integration Provider