Tomorrow's branch: still a vital hub: what's the branch's future? As technology continues to advance, routine transactions will become more automated and many will be conducted outside the branch. While the branch will still be important, its focus eventually will shift more to customer service and consultative functions.

• Author: Deignan, John

MORE THAN 40 YEARS AGO, the introduction of the ATM represented the banking public's first step away from the branch. The inception of this game-changing banking channel gave rise to an evolution that continues today: An evolution in which consumers seek multiple channel options that align with their needs for on-demand, convenient ways to conduct business with their financial institutions.

Today, banks offer consumers more control of their banking experience than ever before. Online banking, mobile banking and new ATM capabilities offer secure, around-the-clock access to banking activities that once could be performed only within the branch. Consumers have unprecedented access to their account information, and financial institutions have the opportunity to enrich their interaction with customers through e-mail alerts, text messages and more. The continued evolution of the out-of-branch interaction between the bank and the banking public will continue to move routine transactions away from the branch environment.

But even as technology has provided consumers with diverse alternatives, the branch remains the hub of banking activity. Regardless of the various channels consumers at their disposal, they continue to rely on the branch when they need the familiarity, flexibility and security of the face-to-face, interpersonal banking options it provides.

In this evolving environment, financial institutions must find a way to balance high-touch and high-tech interaction with their customers. They can make progress toward achieving this balance by shifting the role of the branch, integrating channel touch points and evolving the branch environment

Shifting the branch's role

It's clear that 21st century banking will require financial institutions to re-evaluate the role the branch plays in the comprehensive banking experience. That role will vary from branch to branch, and it will be driven by how consumers want and need to interact with their financial institutions.

The financial industry has long been examining the transformation of the branch to fit the new banking mix. And as technology converges with the continued need for interpersonal banking options, the time to shift the role of the branch is now. That's why banks must gain a better understanding of consumer behavior to ensure their customers are able to use their preferred channels to access information and services. There isn't a one-size-fits-all approach. Each branch must develop a plan that meets the current and emerging needs of its specific customers and its specific market.

For example, a branch that's situated in the middle of a major metropolitan area may be predisposed to more ATM-based deposit traffic and mobile banking customers...