For many years, taxi medallions were viewed as essential infrastructure in the urban experience. In cities like New York, Chicago, and Philadelphia, they were scarce by design, tightly regulated, and required to operate. That scarcity created value, and over time that value became deeply embedded in financial markets.
Medallions traded for extraordinary sums, sometimes exceeding a million dollars, and were routinely used by banks and credit unions as collateral for loans. Major portions of the balance sheets at now defunct Progressive CU, LOMTO FCU, and Melrose CU were built around the assumption that the structure supporting them would remain intact. This helps explain why so many people treated them as permanent assets.
At the time, that assumption wasn’t entirely irrational, although the scarcity of medallions was created by policy rather than dictated by the markets. Transportation required physical vehicles, centralized dispatch, and geographic presence. Within that framework, medallions were not simply licenses. They were necessities. Investing in them looked prudent, even conservative, because there was no obvious way to provide the same service without them.
What ultimately undermined medallion value was not a sudden change in regulation, but a gradual change in behavior. Ride-sharing platforms made it possible for the same transaction to occur, circumventing the regulated model for a lower-cost, more efficient way to accomplish the same outcome. People got rides more quickly. Payments cleared with less risk to both parties. Cities functioned more efficiently. The medallion did not disappear, but it ceased to matter in the way it once had.
Scarcity created by policy can persist for a long time, but it depends on behavior remaining aligned with the structure that policy enforces. Once a parallel system emerges that satisfies the same need more efficiently, the original ‘scarce’ asset can be bypassed without being dismantled. When that happens, the erosion is rarely gradual; a reality the former executives at Blockbuster learned the hard way. The value collapses because the scarcity was contingent rather than intrinsic.
It is difficult not to see a parallel in how financial institutions continue to think about physical branches.
Branches were built because banking once required buildings. Deposits were accepted in person. Payments were initiated at counters. Trust was established face to face. Proximity mattered. Within that model, expanding branch networks and investing heavily in remodels made sense. Physical presence was inseparable from the business of banking, and the logic behind those investments was reasonable.
Money now moves digitally. Payments settle almost instantly. Value can be transferred, stored, and reconciled without regard to geography. For many consumers and businesses, the building is no longer part of the transaction. It exists, but it is not required for the vast majority of financial activity.
This shift is often described as generational, and to some extent that is accurate. Older members, many of whom have accumulated wealth and long relationships with their institutions, still value branches. They are accustomed to them. They may prefer them. For these members, a newly remodeled branch can feel like stability, continuity, and reassurance that the institution is still there.
It is important to serve that population well, especially given that the average member at a credit union is now over 50 years old. The problem emerges when branch strategy becomes synonymous with growth strategy and the assumption that cosmetic updates are the key to attracting new members.
Younger generations interact with the physical world differently, often starting from the assumption that leaving the house is optional. They order food through DoorDash, shop online, and stream entertainment at their convenience. When they need to move money, they expect the experience to resemble the rest of their lives. Fast, low-friction, and available on demand.
For this group, a branch is rarely a destination, and when it is, something has usually gone wrong. Most people do not visit branches to conduct routine business anymore. They go because they are disputing fees, trying to regain access after a digital banking lockout, or sorting through errors that arise precisely because systems do not always behave as smoothly as advertised.
The data reflects this shift. Between 2019 and 2023, transactions conducted in branches declined by 37 percent, as overall electronic banking usage continued to rise. The building still exists, but the center of gravity has clearly moved elsewhere.
This pattern becomes even clearer when viewed through the lens of payments.
Consumers and merchants are gravitating toward systems that offer secure, low-cost, real-time settlement. For merchants accepting stablecoin payments on platforms like eBay, funds are available immediately. For small businesses accepting Bitcoin through modern point-of-sale devices, payments confirm quickly and at a fraction of traditional card costs. In these scenarios, there is little operational need for a bank to sit in the middle of the transaction.
From the perspective of the consumer or the merchant, the appeal is practical rather than philosophical. These systems are reliable, fast, and inexpensive, and simply offering the choice of paying with digital assets sends a strong message to consumers who are just entering the workforce.
For decades, interchange revenue quietly supported much of the traditional financial model. Rewards programs, operating budgets, and physical expansion were built around its stability. That stability is now under pressure, not because regulators have intervened, but because alternative rails have demonstrated that value can move without it.
This shift appears less ideological and more functional, which is often how lasting change shows up.
That’s the thing about artificial scarcity, whether in the form of taxi medallions or physical banking infrastructure, it only holds value until market forces circumvent its necessity.
The uncomfortable question for financial institutions is not whether branches will disappear. Spoiler alert, they won’t. The question is whether continued prioritization of them reflects how members actually use money today, or only how institutions wish they still did.
When capital is allocated toward preserving assets that no longer sit at the center of the system, growth becomes harder to achieve. Existing members may remain loyal, but new members form habits elsewhere, where it’s easy to onboard, easy to transact, and easy to manage every financial transaction from behind a screen.
In an economy shaped by real-time payments, digital settlement, and on-demand services, the idea of buildings as banks deserves careful scrutiny. Not because branches are a bad thing, but because necessity has shifted. What was once required is now optional, and optional infrastructure behaves very differently when markets evolve.
Institutions that recognize that shift early still have choices. They’ll partner with people who aren’t afraid to ask the tough questions, and who will walk the journey alongside them to solve the big issues.
We’re ready when you are.
