Examining the future of retail bank branches post pandemic

For many retail banks, the bank branch is at the heart of the customer relationship. It is where customers go for information, open an account, cash a check, make a deposit, and more. Depending on the type of branch, it can even be a place for coffee and human interaction.

When retail bank branches began to close in response to the COVID-19 pandemic, customers were cut off from this relationship. Although many banks continued to provide services through drive-up windows and by appointment, others had to inform customers that their branches were completely closed. To maintain the customer relationship, banks directed customers to their digital channels.

As countries reopen, what will be the future of the retail bank branch? Given the general consensus that nearly all branches will reopen at least for now, there are three courses of action for retail banks to consider:

1. Continue to rapidly digitize services. Banks around the world have doubled-downed on digital to make it easier for customers to access the information and services they need remotely—with many banks automating services in record time to help respond to new government stimulus programs resulting from the pandemic. For many customers, digital has become the default path for interacting with their bank, and the rapid development of digital services is helping banks build greater business agility into their ways of working. (See related examples of our work with a national Canadian bank and a large U.S. regional bank to help them optimize costs and customer service.)
2. Think of the branch as the new office. In April, Barclays CEO Jes Staley said that having thousands of bankers in city offices “may be a thing of the past” in light of the pre-pandemic trend of placing bank staff away from expensive city centers and the post-pandemic lockdown that found staff suddenly working from home. As branches reopen, bank executives will examine their future workforce and workplace strategies to leverage learned productivity and customer service gains, to minimize corporate real estate expenses, and to enable staff to minimize commutes and better connect with their communities.
3. Re-task branch staff to provide additional services. Although many countries are resuming more normal levels of activity, branch foot traffic, which was already on the decline, has yet to reach pre-pandemic levels. This creates the opportunity for branch staff to provide services to other parts of the bank, such as answering customer service calls, aiding in collections efforts, or acting as service agents for government programs. 

Now is the time to reinvent the branch concept altogether. Given the disruption in the industry and the greater emphasis on digital channels, the branch could become a key enabler of a bank’s technology supply chain, becoming an online-initiated destination for more detailed information and building upon the appointment-only model some branches used during the pandemic.    

Although it is too soon to tell what branch traffic will look like post pandemic, changes in products and services, business models, and even branch layouts are a given. Rapidly identifying and adapting to the in-person and digital needs of the post-pandemic branch customer will enable banks to cascade changes across the branch network more quickly. In addition, it will enable them to quickly develop or acquire the products and services needed to preserve customer loyalty, a measure that has been in decline in recent years.

CGI is working with banks worldwide to help them respond, rebound and reinvent in the face of the COVID-19 pandemic. To learn more about our work, contact me at andy.schmidt@cgi.com.