Retail banks all over the globe responded to the pandemic by closing branch lobbies while steering customers towards digital and ATM channels. With millions of new digital banking users, what will become of the lowly branch? Celent unpacks this question in this tenth Branch Series report based on our Branch Transformation Research Panel.

Branch channel activity largely rebounded post-lockdown and is expected to return to near pre-COVID-19 levels in the coming year. Still, many surveyed institutions expect to trim their networks significantly over the next two years alongside technology, human capital, and structural changes as customers continue their move toward digital engagement.

Beyond the immediate actions needed to respond to mandatory lockdowns, institutions urgently pursued digital rather than physical distribution initiatives. Yet, change is in the air. Most notably, banks tell us they expect a significant reduction in the number of operational branches over the next two years (Figure 1).