Adaption, not abandonment, key to branch survival post COVID-19

Tom Kennedy

The bank branch is changing. This was true before COVID-19 and changes will further accelerate as we consider branch strategies in the post-pandemic world. While I firmly believe the physical bank branch is core to the business model, and success, of banks, there is no question that the functionality, design and purpose of the branch can and should be evaluated in response to post-pandemic human psychology and emerging safety best practices. Like past black swan events, the driver of any bank’s success in the midst of COVID-19 will be its ability to adapt.

Banks were already seeing a trend toward more consultative space within branches, as customers sought out expert guidance through key financial decisions. The need for consultation with financial experts will be amplified as more customers seek to adjust or rebuild their finances post COVID-19. After experiencing new challenges, financial losses and overall uncertainty, customers will crave knowledge and control over every aspect of their lives – especially their finances. Customers look to people as experts and research shows that those with lower financial confidence use branches more. People also trust banks more when they have physical branches. Showcasing the consultative space of the branch, and positioning individual experts, will build trust and strengthen relationships.  

As an industry, we must adapt to how COVID-19 and social distancing has shifted our feelings, thoughts and beliefs about how to interact in public spaces. If people are uncomfortable with the physical setup of a branch, they will pursue other channels – or another bank – that makes them feel safe. Modifications that put public health and safety as a top priority will be highly valued by customers and employees alike. Automatic doors, touchless features, thermal scanners at entry points and/or natural barriers to create physical separation are all elements that branch executives should consider both in the bank lobby as well as in the back office. 

For anyone still thinking they may need to put all their eggs in the “digital ‘basket,” it is also worth considering that while banking customers may be getting more used to instant and anytime access, consumers in general have begun to indicate digital fatigue. This will only be exasperated given “safer at home” orders across the country. Post COVID-19, many consumers will be seeking experiences to escape the digital environment but will simultaneously have a newfound concern of the safety of crowds and public spaces and the need to adjust their financial plan and products. We believe it will be in banks’ best interest to embrace an omni-channel approach and that a true digital strategy will support in-person branch service, remote service through call centers and self-service on mobile and web.

When it comes to the consumer journey, banks have historically been behind the times. For decades, the banking experience has looked and felt the same, and customers were okay with that. But COVID-19 will be a driver of change. Banks that remain the same pre-COVID and post-COVID may not survive, and certainly will not thrive. In these uncertain times, one thing is clear: Organizations that succeed in the post-pandemic world will be those that recognize and seize the opportunity to look ahead with optimism and choose to adapt.

Tom Kennedy is president of La Macchia Group, the trusted development partner of more than 400 financial institutions across the nation. Leveraging more than 30 years of leadership and management experience in the design-build industry, Kennedy works with clients to design and build market-driven, brand-centered financial institutions, tailored to meet each client’s unique needs. To download La Macchia Group’s whitepaper analysis of branch banking in a post-pandemic world, visit: https://www.lamacchiagroup.com/adaptabilitywp.