In his recent Financial Brand article, “‘The Branch Is Dead’…Is Dead: Have We Reached National Branch Equilibrium?”, Steve Reider makes a strong case that the long-predicted demise of the branch was, in fact, premature. Actually, he goes further to declare the debate is over. He says, “The branch won.” That’s a pretty bold statement, but is he correct? Well, I have been a pretty consistent supporter of the bank branch, so I would say the answer is Yes! The branch is not dead. However, I also contend that the branch of the past is not a valued model for tomorrow’s customers. So, if your focus for the branch is centered on transactions, such as opening accounts, cashing checks, etc. then no, that model of the branch is definitely … dead. If we interpret the article as validation that branches should continue operating the way they have for the last 30 years, we will miss the bigger strategic point. The branch didn’t “win” because transactions returned or are valued. The branch will be (or become) incredibly strategic because its purpose will evolve. If community banks don’t intentionally accelerate that evolution, from transaction center to engagement hub, we will squander the advantage the branch still gives us. Reider does an excellent job of unpacking the data. After years of net closures following the financial crisis and the pandemic spike, branch counts are stabilizing. Closures are slowing. Openings remain steady. Large institutions like JPMorgan Chase, BofA and CapitalOne are expanding their footprint. So, that supports the “branch is dead” narrative being wrong. Yet, here’s the nuance, branches survived not because transaction volume returned, but because smart banks rediscovered their true mission. And as Reider rightly points out, the branch’s primary purpose has never been to cash checks, it has been to sell financial products and provide advisory support. Exactly. In-branch transactions were always a burden activity. Initially, our computer systems forced transactions to be conducted in-branch. As technology evolved to move transactions online to make self-service easier, branch activity largely remained unchanged. Advisory conversations, consultative selling and problem solving should always have been the center of the branch’s purpose. And yet, most community banks are still organized around the burden. If a customer walks into your branch to transfer funds, deposit a check, pay a bill, check a balance, or open an account, this may be bringing them in the door, but is it because of a problem with your digital strategy? I’ve written before and I will keep writing that the virtual branch is (or should be) the primary branch. Online and mobile banking are now the dominant customer touchpoints. The physical branch must augment that experience, not compete with it. If your branch is still structured around teller lines, static desks, and tent card advertising, you are solving yesterday’s problem. You are staffing for declining transaction volume while ignoring a growing engagement opportunity. The Financial Brand article notes that many customers still value branches, especially small businesses. Maybe that’s true. But ask yourself this: Where does the customer interaction begin? They start on their phone or the computer. They check balances, transfer funds, pay someone via P2P, open accounts online, and research rates digitally. It’s incredibly convenient for them to access those resources online at a time and device of their choosing. By the time they enter your branch, they are not there for a transaction. They are there because: Something is confusing. Something is complex. Something requires trust. Something requires human reassurance. Something requires wisdom. This is where engagement intersects. The branch must become the physical extension of the virtual experience. Not a parallel system or a competing channel. A literal extension. Reider makes an important point about households-per-branch efficiency increasing even as counts stabilize. That’s good math, but efficiency cannot be the only metric. Your branch square footage hasn’t changed, which exacerbates the “bad look” of a virtually empty branch with very few visible employees. Picture a prospect who enters a branch. If what they see is a teller that had to come from the drive through area to greet them, you have an experience problem, not a footprint problem. Customers equate visible expertise with strength. If the branch looks dead, the branch feels … dead. This is why simply “maintaining branch count equilibrium” is not enough. The physical environment must signal engagement accompanied by expertise. In previous articles, I’ve advocated for branch transformation, shifting away from a transaction focus to an engagement focus. What does that look like? Eliminate the traditional teller line. Replace static desks with collaborative spaces. Provide trained sales and education focused branch personnel. Deploy video connections to access specialists regardless of locations. Make scheduling seamless and digital-first. Use tablets in-branch just as customers use mobile devices. The branch should look and feel like a place where wisdom is provided and problems get solved. Not a place where paper slips get stamped. When JPMorgan opens a new branch, it is not because they believe in handwritten deposit slips. It is because physical presence enhances brand trust and advisory activities. Community banks embracing this model should have an incredible advantage here … if we use it. Reider references the concept of the “evoked set” — the brands that come to mind when a customer has a need. That’s a critical point, but the evoked set is now formed digitally first. Your branch signage might implant awareness. Your digital experience determines selection. However, know that if your mobile app is clunky, if online onboarding is frustrating, if online chat can’t understand intent, if FedNow push credits aren’t available, your branch becomes irrelevant before the customer ever steps inside. This is why branch transformation must follow digital transformation, not precede it. The virtual branch is the primary touchpoint. The physical branch is the reinforcement and supplementary engagement mechanism. One area where Reider is absolutely correct is small business reliance on branches. Businesses still need cash handling, more complex advisory needs and relationship-based lending. Yet even SMBs now live in a hybrid world. They: Use online treasury management services. Initiate ACH files and wires digitally. Monitor balances via mobile. Expect real-time payments. When they come into the branch, they should not be filling out wire forms. They should be: Discussing cash flow strategy. Reviewing borrowing base structures. Exploring payments optimization. Learning how to accelerate receivables. The branch should elevate these conversations. If you read Reider’s article quickly, you might conclude: “Good news. Branches aren’t dying. No big changes are needed for branch transformation.” That would be a strategic mistake. The correct conclusion is, “The branch survived because it changed. Now we must change faster.” Large banks are not building 5,000-square-foot transaction hubs. They are building smaller, under 2,000-square-foot engagement centers. They are pivoting from transactional throughput to consultative engagement. Community banks cannot afford to miss this moment of transformation for the physical branch. If you are a community bank executive reading this, here are the questions you should be asking: What percentage of in-branch interactions are transactional versus advisory? Is our virtual branch accurately reflected on the general ledger? Does our branch layout encourage conversation or queueing? Do our employees look like transaction processors or problem solvers? Does our branch augment our digital strategy or compensate for its weaknesses? If the branch is primarily serving as a workaround for less-than-optimal digital delivery, that is not sustainable. You must have a strategic focus to fix your virtual branch first. Then redesign the physical branch to support and extend the customer experience. The future is not digital-only. The future is not branch-only. The future is a hybrid, but a hybrid focused on thrilling and delighting younger customers. Digital handles: Transactions Routine servicing Notifications Education snippets Payment execution Branches handle: Advisory Trust-building Complex problem resolution Small business engagement Wealth conversations Both will have elements that overlap. If there is a video on the mobile app targeting younger customers with education on the benefits of delayed gratification, that same video should be available on a big screen in the branch. Can an account be opened in a branch? Of course! But open it on the customer’s phone. When done correctly, the branch becomes a destination, for consultative selling, education and problem solving. Not because customers must go … but because they want to go. The “branch is dead” narrative was wrong. But a “branch as usual” narrative would be equally wrong. Branches should not be preserved. They should not simply receive a “makeover” with new paint, updated furniture and brighter colors, with no change in function. They should be reimagined, repurposed. The virtual branch is the primary touchpoint. The physical branch must augment it. If we align digital excellence with intentional branch engagement, community banks will absolutely thrive. If we don’t? We may win the branch debate but lose the relevance war. As always, if you want to talk about how to rethink your branch footprint, redesign engagement strategy, or align physical presence with digital primacy, reach out to me at dpeterson@bankers-bank.com. Resources https://thefinancialbrand.com/news/customer-experience-banking/the-branch-is-dead-is-dead-have-we-reached-national-branch-equilibrium-195842 Authors Note – ChatGPT was used for research for this article