In just the last 15 years, the number of bank branches in the U.S. has plummeted from nearly 100,000 to just 77,500. This is more than an effect of the COVID-19 pandemic. These closures reflect a broader trend of banking in the digital age that prioritizes digital space over brick-and-mortar establishments. But even as the use of chatbots and apps grows, in-person interactions are an essential component of providing the best possible care for members. Though overall branch numbers are down, some of the largest banks and credit unions have been opening branches in high-deposit areas, strategically creating pockets of growth. Credit union leaders must recognize the wisdom of strategic development and the vital role of physical branches in laying the groundwork for the future growth and success of their institution and its members.
Despite the trend toward digital banking, human interaction remains a core tenet of effective customer service. Positive experiences are the foundation of a lasting business relationship, and 73% of customers point to customer experience as an important factor in their purchasing decisions, according to a study by PricewaterhouseCoopers. Further, the findings from a 2024 study by Five9 show that 75% of consumers still prefer talking to a real person for customer service over an AI-led or entirely self-serviced interaction. That personal, human representation at a local branch is essential for providing the exceptional service that builds long-term member relationships.
With such clear consumer preference for human interaction, it’s no surprise that customers across generations still prefer branches over digital channels when opening new accounts. Though day-to-day transactions may be overwhelmingly digital, branches accounted for 72% of newly acquired current accounts in North America and represented 92% of new current account balances in 2023. While digital banking is a valuable tool, credit unions must integrate it with in-person experiences to continue growing their membership and services.
These statistics aren’t just suggestive—they’re definitive. While roughly 66% of digitally onboarded customers leave within a year, this number drops to only 25% for members who were onboarded in person. Additionally, branch-acquired account balances are seven times greater than digitally acquired accounts. Branches are integral to facilitating customer investment and expanding, not just maintaining, client interaction. The numbers strongly suggest that the member-union relationship built by branch access is at the heart of continued and substantial investment. With the overwhelming majority of US consumers wanting more human interaction in business, branch retention is a powerful way to maintain meaningful connections with members.
Digital banking’s greatest value lies in its ability to enable interaction, not eliminate it. With the time saved by automating routine tasks through digital offerings, branches could engage more deeply with the communities they serve. Educational programs, community engagement initiatives and in-person meetings allow members to benefit from the financial expertise of branch staff. With the listening ear and expert guidance of banking staff, members can receive customized guidance that promotes their immediate and long-term financial goals. When it comes to member advocacy and comprehensive care, human connection and communication are necessities.
Physical branches shouldn’t disappear, but they must evolve. Even in an increasingly digital world, branches allow credit unions to deliver multi-platform, comprehensive member care that puts service first. Adapting branch offerings to include more digital services frees staff to focus on more complex needs and will enhance the level of care credit unions can provide. While closing a branch may save some operational expenses, an open and vibrant branch cultivates lasting relationships and customized financial guidance that help both the credit union and its members succeed in the long run.
