By Juliet D’Ambrosio
Since 2000, banking leaders have seen the future of financial services through the lens of digital transformation. As consumer adoption of mobile banking continued to rise, marketing dollars naturally followed.
But data featured in the new report, How De Novo Expansion is Reshaping Retail Banking by Curinos and Adrenaline reveals a significant turnaround: Banks have opened more than 1,000 new branches annually over the last three years, reversing a decade-long wave of consolidations and closures. As large banks aggressively enter new markets and update branches in existing ones, regional and community banks are reassessing their own networks for growth.
For brand and marketing leaders, this surge in branching matters. Not only are most new-to-bank customers acquired through the branch, the relationships that start there are more profitable and durable. Branch-initiated accounts carry higher balances than those opened in digital channels, and branch-acquired customers are 25% more likely to remain with the bank after a year. This new branching boom presents a great brand and marketing opportunity. But to capture the full potential, banks must ensure that brand, marketing and the branch work together cohesively, so every location is primed to maximize growth and nurture customer connections.
Defining the role of the branch
A branch communicates with customers long before they walk through the door. Exterior signage creates brand visibility and physical presence reinforces the bank’s commitment to the community.
As one of the most tangible expressions of the brand, the branch is a local beacon and a place where a bank’s purpose is made manifest. That role becomes even more critical as national banks move into new markets with their big budgets and even bigger brands. But community and regional banks hold considerable advantages of their own: longstanding relationships, local knowledge, and community credibility that larger competitors must build from scratch when they enter a market.
For a branch to succeed, marketing and merchandising are essential – and effective branch marketing begins with a clearly defined purpose. That means understanding what a location is there to accomplish, who it’s designed to serve, and what the bank can offer that will be meaningful to the market. Defining what a branch represents is essential as banks develop and deploy different branch formats across their networks. A flagship location that focuses on advisory services has a different story to tell than a neighborhood branch that serves everyday banking needs. Connecting network, brand and market strategies from the outset empowers marketing to convey a clear proposition and the physical experience to deliver on that promise.
Branch opening opportunities
One of the biggest mistakes a banking brand can make is treating branch opening as a singular event rather than the start of a sustained engagement effort.
The assumption that merely opening a branch location will naturally generate foot traffic is increasingly out of step with the way customers choose their primary financial institution, especially as branches take on more specialized roles in people’s lives. Some branches are primarily advisory, while others are designed around particular customer segments. Marketing has a vital part to play in introducing a bank to the market, communicating brand purpose, and demonstrating how the bank delivers distinctive service to customers and communities.
A successful market-entry strategy introduces the institution, establishes why it’s relevant, and provides increasingly specific reasons for prospects to engage. That kind of effort takes time to take root. For new locations in new markets or significantly updated branch formats, banks should plan for an 18- to 24-month marketing impact rather than a short burst of activity around opening day. The rollout doesn’t look the same for every bank. Whether banks have large budgets or small, all financial institutions can use entry campaigns that draw on targeted, localized approaches, including grassroots outreach, community events, even micro-influencer partnerships to introduce themselves to a new market.
Smaller footprints demand better experiences
The branches being built today look decidedly different from the large, sprawling locations of the past. Post-2020 branches are about 25% smaller on average than earlier new builds, and the average new banking location operates with just 3.6 full-time employees. At the same time, these branches must support mission-critical consultations that consumers demand to navigate their increasingly complex financial lives. But a smaller branch doesn’t mean less impact. In fact, reduced footprints put even more pressure on banks to make every element of the experience work harder.
Environment, technology and staffing all have to come together to reinforce the same promise. Marketing sets expectations that the actual branch experience delivers on. The space needs to communicate the brand, while technology removes friction. Branch employees must be equipped to move between service, advice and relationship-building, with technology that makes them more efficient, opening up an opportunity to provide the human connection customers seek. Marketing can bring people through the door, but the branch experience must fulfill the promise that brought them there in the first place.
Don’t market the branch in isolation
Because branches are inherently local, brand and marketing strategies should generate meaningful awareness within the specific communities a location serves while reinforcing the institution’s connection to the market.
At the same time, the resurgence of branch banking does not mean consumers are moving away from digital channels. Consumers expect both online convenience and access to human expertise, moving between physical and digital interactions based on what they need at a particular moment. For marketers, the more useful question isn’t whether physical or digital deserves greater emphasis, but what role each plays in the customer journey – and how effectively the brand connects those experiences.
One consumer may discover a bank through marketing, research it online, begin an application digitally and ultimately visit a branch for advice. Another may first encounter the institution because a new branch came to the neighborhood. In either case, those interactions should feel like engaging with the same institution, with brand identity, messaging and value proposition carried consistently across channels. While banks are still working through the operational challenges of creating truly seamless experiences, marketers can establish expectations, reaffirm the brand proposition across touchpoints and support customer journeys that reflect how people actually move between channels.
Branch expansion is a brand opportunity
The current expansion wave will reshape competitive markets for years to come, but simply adding locations won’t determine who wins. A branch can introduce a bank to a new market, make an established brand more visible, demonstrate community commitment and create a setting for the human interactions that deepen relationships,. But customers do not distinguish between the brand and the branch experience. The branch environment, employee engagement and digital experience all contribute to customers’ overall perception of the banking brand’s value in their lives. When experiences consistently reinforce the brand promise, physical presence can turn awareness into acquisition and acquisition into long-term value.
For bank marketers, the role of the branch in shaping brand perception makes network strategy a key part of the larger brand picture. Marketing should have a meaningful voice in shaping each location’s role in the market and ensuring the brand promise carries through to the customer experience. Bringing that perspective into network planning ensures that branch investment supports not only overall growth but the brand strategy – with each location becoming an opportunity to express the brand to customers and communities. As financial institutions weigh their next round of network investments, the most important question is not simply where the next branch should go, but what the brand wants that branch to say.
Juliet D’Ambrosio is chief experience officer at Adrenaline.
