Insights

Bank branch networks in a digital market: efficiency without losing customers

Techtone Group · Sep 7, 2026 · Last reviewed Oct 14, 2026

Customers now do most of their banking on their phones, but they still choose a bank partly for its branches and turn to them at important moments. The answer is not fewer branches by default but a network where every branch has a clear role, routine transactions move to digital channels, and branch staff are rewarded for helping customers go digital.

Why branches still matter

Branches remain the place for complex advice, for mortgages and investments, for customers who are less comfortable online, and for building trust in a region where the bank is new. They are also the most expensive channel. The task is to keep the value of presence while removing the cost of routine work.

Give every branch a role

• Advisory hubs in larger towns, staffed for mortgages, investments and business clients.
• Light branches with self-service and a small team focused on helping customers use digital channels.
• Virtual branches for advice by video and phone, serving customers wherever they are.
• Partner points such as post offices or retailers for cash and basic services where a branch no longer pays.

Move routine work to digital

• Remote identification and digital onboarding, so a customer can open an account without visiting.
• Digital servicing for card limits, address changes, statements and certificates.
• Appointment booking, so branch time goes to conversations that need a person.
• Clear routing: every routine request that arrives in the branch is a signal of a missing or hard-to-find digital journey.

Make branch staff part of the shift

Branch teams decide whether customers adopt digital channels. If their targets reward only products sold in the branch, they have no reason to show a customer the app. Incentive schemes and training that reward digital adoption, alongside sales, change behavior faster than any campaign. A sales academy that builds advisory skills helps staff move from transactions to advice.

Measure the network, branch by branch

• Cost per branch against revenue and customer value attributed to it.
• Share of transactions that could have been done digitally.
• Digital adoption of customers served by each branch.
• Customer satisfaction and churn after any change in the network.

Sizing the network from the customer outward

Network decisions are often made from the cost side alone: close the branches with the lowest profit. A better start is the customer: where customers live and work, which needs still bring them in, how far they will travel for advice, and which segments would leave if a branch closed. Mapping customer value and travel time around each branch shows where a light branch or a partner point can replace a full one without losing the relationship, and where the network is in fact too thin.

The role of data

• Transaction data shows which visits are routine and could move to digital.
• Appointment data shows demand for advice by topic and time of day, which sets staffing.
• Customer data shows which households depend on a branch and which already bank mostly on the phone.
• Digital journey data shows where customers start online and finish in the branch, which points to the digital journeys that need fixing first.

Small business clients need their own answer

Small businesses often depend on branches for cash deposits, documents and advice, and they generate a large share of a retail bank’s profit. Before converting a branch, banks should know which business clients use it, offer them alternatives such as deposit machines, relationship managers by phone and digital document submission, and check that the alternative works before the branch changes.

A realistic sequence

• First, fix the digital journeys that send customers to branches for routine tasks.
• Second, change incentives and training so branch staff help customers move.
• Third, convert branches to new roles where the data shows routine demand has fallen.
• Only then, close or merge the branches that no longer serve a clear purpose.

Change carefully, and explain

Closing or converting branches without preparation loses customers, especially older ones and small businesses. Customers should hear early, be shown the alternative and be helped through their first digital transactions. Banks that do this well keep the customer while reducing the cost to serve.

Related service: Strategy and digitalization