Octavio Marquez is president and CEO of Diebold Nixdorf (NYSE: DBD), a world leader in transforming the way people bank and shop.
From the “Golden Age” of bank branches—with marble floors, ornate vaults and velvet ropes organizing the customer queue—to the modern age of drive-up lanes with self-service ATMs, and now to today’s environment featuring kiosks and video tellers, branch banking has evolved significantly over the past century. Despite this evolution, the branch remains a vital part of the banking experience—even as technology reshapes how customers engage with their local banks.
In a recent YouGov survey commissioned by Diebold Nixdorf, 33% of U.S. consumers reported that branches are essential for conducting their banking activities. These numbers hold true across all age groups and are reflected in Bank of America’s recent decision to open more than 165 new branches by the end of 2026, Chase’s multibillion-dollar investment to open more than 500 branches and hire 3,500 employees by 2027, and PNC pledging to increase branch investment by $500 million to double its planned branch openings to more than 200 across six states.
Customer preferences must be the compass for innovation, and financial institutions must respond to changing needs and expectations to ensure core services remain available. They must transform the branch model to provide flexibility, personalization and a seamless customer experience. Every solution—whether physical or digital—should be guided by one principle: giving customers the freedom to bank where, when and how they want.
Blending Physical And Digital Channels
The key to meeting the needs of modern customers is leveraging an optimal blend of physical and digital channels. An integrated physical-digital approach positions branches as flexible, customer-centric service hubs. From Australia to Europe, we see efforts to protect cash availability, as it remains a critical payment method for many worldwide. It also remains a secure, cost-efficient and anonymous payment method for all demographics. These movements signal a continued mandate for financial institutions to provide access to cash in addition to the latest digital banking options.
Banking strategies that integrate physical and digital experiences ensure that financial institutions can pivot quickly to accommodate evolving customer preferences and navigate unforeseen challenges, such as shifts in customer traffic or local disruptions. Customers can initiate transactions digitally and complete them in-branch or vice versa, while digital solutions reduce wait times and increase efficiency, creating a more convenient branch experience.
Financial institutions that stick with outdated legacy systems will find themselves flatfooted when it comes to meeting customer expectations. If you’ve ever rented a car and couldn’t connect your phone to Bluetooth or CarPlay, you know how frustrating it can be to feel like you’re taking a step back technologically. Banking should be no different, and those who prioritize blended solutions will find themselves attracting customers who couldn’t get what they wanted from someone else.
The Promise And Perils Of AI In Branch Banking
Artificial intelligence promises to transform nearly every corner of our everyday lives, and banking will be no different. However, we should expect financial institutions to be cautious in their approach to AI. A balanced approach is essential. AI should complement human service, not replace it.
Many financial institutions have been using some form of AI or machine learning to enhance branch operations and customer experiences for years. However, advances in AI, specifically large learning models and generative AI tools, pose new risks—and financial institutions must be careful to use these technologies responsibly and transparently.
There will be opportunities to make branches more resilient via AI-driven tools. From advanced customer analytics to personalized service recommendations, banks can enrich customer experiences by delivering tailored support and insights. Chatbots and virtual assistants are already reshaping customer service touchpoints, handling routine queries and providing information quickly, reducing the strain on branch staff and improving response times. When looking to mitigate potential risks, institutions must be mindful of data privacy, bias in AI decision making and the need to maintain human oversight.
Cash Automation: Transforming Efficiency And Security
As financial institutions modernize their physical bank branches and self-service channels, we should expect to see an increased focus on managing the cost of cash. Cash management can be an expensive headache for branches, and they will need to innovate to keep their branches resilient and efficient. At a time when banks are under immense pressure to streamline operations and reduce costs, cash automation technology may provide the blueprint for building a more sustainable branch. Like a Swiss Army knife, cash automation solutions can be deployed throughout the branch, reducing operational burden, mitigating risk and allowing for more secure cash handling.
Historically, a lack of integration between the branch and ATM cash ecosystems has driven redundancies and inefficiencies. By reducing the time branch staff directly contact cash, they can focus on more high-value customer interactions and deepen customer relationships. Future branches adopting a cash automation strategy will have a competitive edge, combining operational efficiency with security critical for trust building in customer relationships.
The Essential Role Of The Bank Branch In The Future Of Financial Services
The evolution of branch banking should not be viewed as having to choose between physical and digital, but as finding the right blend that enables customers to bank the way they want. Despite a digital-first trend, branches remain an essential channel for complex, high-value services and relationship building, providing a trusted environment for in-person interactions. The recent YouGov survey also found that 81% of consumers tend to turn to in-branch staff when encountering friction related to process or trust, highlighting just how critical it is to have staff ready to engage with customers when needed.
Technological innovation is now strengthening branch banking’s unique and enduring value as a core pillar of financial services. As banks blend the best physical and digital services, branches will remain vital by adapting to customer needs with enhanced options and flexibility. The future of banking belongs to institutions that—like those pioneers of a bygone era—recognize the branch as a dynamic, resilient service point that embodies trust, choice and convenience.
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