Branch banking in the digital age

A version of this article appeared in the BAI Special Report: The continued digital evolution in banking. You can find more insight within on sustaining deposits via digital channels, how open banking will shift digital strategies, tapping BaaS for an enhanced branch role and making fraud protection a priority during digital growth.

James Anthos Jr. is director of retail distribution strategy and analytics at Fifth Third Bank. He oversees more than 1,100 branches and 2,400 ATMs, including their significant branch expansion into high-growth southeast markets. He actively supports market-by-market strategies for overall branch coverage by creating long-term strategic plans for distribution, including consolidations, relocations, renovations and other initiatives.

Anthos collaborates with the bank’s Decision Science Group, leveraging award-winning geospatial capabilities to select optimal branch locations. He also works with the retail design team to develop the NextGen kit-of parts that support the overall design and elements of a branch, ensuring each branch is prepared to deliver a banking experience that is a Fifth Third better.

The landscape of new banking customers in the digital age is dotted with accountholders who have never set foot in a bank, branch or otherwise. How can banks—and their bankers—build face-to-face relationships?

First, it’s important to recognize that there will always be customers who do not desire face-to-face contact, and they are equally as important to us as those who want to bank in person. We offer tools and services that allow our customers to bank with us the way they want to bank. For customers who prefer to only bank online, our Fifth Third mobile app is continuously updated to offer a seamless digital banking experience. This flexibility positions us to remain a digital-focused customer’s preferred bank while offering a suite of experiences that appeal to many different customers.

Second, you can change the design of a branch, but more importantly, you must change the approach our bankers have with customers. Fifth Third takes a personalized, proactive approach to customer engagement. When COVID-19 first emerged and the world went into lockdown, we prioritized calling more than 2 million customers to check on their well-being and offer assistance. These simple phone calls led to a tremendous amount of positive feedback from customers. Today, all branches are making outside calls, outside appointments and routine touchpoints part of normal business operations. We want customers to know that we can assist with their financial needs wherever and whenever they require us.

Which transactions or account openings are most likely to attract in-person engagement between customer and banker?

Those that require conversation and guidance from a banker. Typically, more complex transactions have a significant impact. Some of the most important decisions a customer may make in their lifetime include buying a house or car, saving for retirement or their child’s college fund or investing.

There are many options to consider when weighing significant financial decisions. A seasoned finance expert can walk customers through this process and offer a personalized consultation. While conversations can occur through other means, most customers prefer to discuss these decisions in person.

Conventional wisdom says branches build relationship-banking. Is that still true as the digital evolution continues to build?

Absolutely. Consider if someone is purchasing their first home. That is a highly stressful and emotional decision. Can you really reduce one of life’s biggest decisions down to a “Buy-it-now” button? Some might, but most want to confirm that they are making the best decision possible, and you make those decisions with someone you trust. More than any product or service a company can offer, trust is ultimately what closes the deal. And we need digital innovation, which is one of our priorities at Fifth Third. For our customers, it allows them earlier access to their money, reduces friction in transactions, helps protect against fraud and streamlines everyday banking.

The bottom line is that when it comes to making decisions that will affect you and your family for years to come, the comfort of having someone you trust guiding you through the process is critical.

How do community demographics inform strategies and decisions that guide the maintenance of existing branches or the building and location of new branch banks?

Our distribution strategy focuses on creating a network that can best serve the largest sectors of the population in that Metropolitan Statistical Area (MSA), deploying a combination of branches and ATMs. We focus on customer convenience, considering where they might go on a normal day and placing branches close to that activity. Our award-winning data science platform has allowed us to uncover unexpected locations that meet these criteria, allowing us to continually meet customers where they are as their retail habits evolve.

At Fifth Third, we are also focused on catalyzing transformative change to create economic mobility for historically underserved communities. One way we’ve been able to do this is by opening branches in banking deserts. We’ve employed data science to better understand these banking deserts, which represent 5.9 million people who can be better served through banking. In 2023 alone, we opened 11 new Fifth Third branches in low- and moderate-income or high minority population census tracts.

Are there branch-specific promotions that have shown potential for attracting new or existing customers as the digital age evolves?

Given our ambitious expansion program, we are utilizing a suite of promotional offers that attract new customers across a variety of marketing channels. Our dynamic marketing approach extends beyond digital. Fifth Third bankers are proactive in the community, offering in-person promotions that complement direct mail or digital marketing offers. For existing customers, we’re using advanced analytics to drive more personalized conversations and offers across our channels.

As banks and credit unions look to their future footprint in communities, what will branch buildings look like?

As more daily banking is accomplished digitally, fewer transactions need to happen in person, which affects how we think about maximizing our spaces to best meet customer needs. We’ve evolved our branches to be meaningfully smaller, which has helped us be more sustainable and lessen our environmental impact in communities.

Our modern space design prioritizes conversations, which is reflected in everything from what we put on the wall to the different seating arrangements that flex to facilitate more open or private conversations. We want our customers to feel comfortable discussing their banking needs, whether that warrants a more formal, closed-door environment or something more relaxed. We’re constantly looking to improve so we can welcome customers into modern spaces with options to best serve their banking needs.

As potential and current customers evolve in their relationship with their banks, will Banking as a Service—or BaaS—inform the role or design of branch banks?

Financial decisions and the movement of money are embedded in almost every aspect of our daily lives. While it is crucial to consider embedded payments and other digital transformations in our branch design, it is equally important to think about the knowledge base our branch employees must possess to engage in these conversations. They must understand the ecosystem a customer uses and be capable of solving problems and designing solutions based on that usage. Consequently, our spaces are designed to facilitate in-depth conversations, supported by technology and knowledgeable employees.

The architectural and interior design of banks has for generations helped build a reputation for solid and dependable members of a community. Moving into the digital age, can architectural design help banks and credit unions build a reputation as tech-savvy resources for customers?

At Fifth Third, we are committed to evolving with our customers and aim to excel in delivering what they need to manage their financial lives. Our digital platforms handle many aspects of customers’ day-to-day needs. Where we excel is integrating our digital services with the in-person customer experience at our branches and utilizing this channel to deepen customer engagement. We never want a customer to come through our doors, after spending time online, to have to start all over again with an in-person banker. We want the transition to be seamless so, together, the customer and banker can focus their discussion on achieving financial success. By structuring our design around customer interactions, we can deliver world-class service.