Bank Branch Buildouts and Upgrades Show Omnichannel Is Here to Stay

The pandemic threatened to make banking in the brick-and-mortar setting a bit of an anachronism.

Lockdowns meant that getting things done at the counter with a teller, or sitting down with a financial representative, was either impossible or took longer than getting things done online.

But the reality post-pandemic is that bank branches and mobile channels have become intertwined. For the banks themselves, the strategy is one of offering a seamless continuum of digital and in-person interactions as consumers and commercial clients do everything from opening accounts and applying for loans to getting their financial lives in order.

Several of the biggest banks in the United States have been adding branches and plan to do so through the next several years, upgrading existing locations and allowing for digital activities to be part of the equation, in real time and real life, so to speak.

PYMNTS Intelligence found that more than a quarter of banking customers prefer to meet their servicing needs at a branch, and half of customers prefer to visit branches for sensitive or complex needs, such as fraud or financial advice.

J.P. Morgan Chase, one of the largest banks in the U.S., reportedly plans to open more than 500 new bank branches over the next three years.

Chief Financial Officer Jeremy Barnum said on an earnings call last month that with $1 billion earmarked for increased spending on operations and upgrades for the firm, the “biggest driver is … growth writ large.”

“The quantum of investment increase is comparable to last year’s increase and is driven by all the same themes: bankers, branches, advisors, technology, as well as marketing,” he added.

Last year, the company built 166 new branches, he said.

The company’s earnings supplementals showed that total branches at the end of the year stood at just under 5,000, so all else being equal, the plans to build 500 new branches would be a 10% boost (although the net impact could vary a bit if other branches are shuttered).

With a nod to the omnichannel efforts, J.P. Morgan noted in an online post that “technology will continue to bridge the gap between physical and digital experiences.” Amid the linking of digital and physical services, the company pointed to digital meeting scheduling functions housed within the app.

Banks are also striving to arm client service specialists with data flows and insights that streamline and personalize the interactions once clients arrive at a branch.

Separately, Bank of America’s management noted in its earnings report that this year will see $3.8 billion spent on technology initiatives, up from 2021 and 2022 by about $500 million.

As CEO Brian Moynihan said on a conference call with analysts, “We keep opening the branches. We’re largely through the rehab of the branches that we’re keeping.”

Artificial intelligence is helping bridge interactions across 170 million phone calls, visits to branches and email inquiries. The company opened 52 more financial centers in 2023, with a tally at the end of the year of 3,845.

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