There is a “good news, bad news” scenario going on in the financial services world these days.

First, the good news
Consumers are conducting more and more basic transactions from their smartphones. Transactions such as checking balances and moving money from one account to another — which once required a trip to a branch office — are now being conducted from the palms of their hands.

This is good news for banks and credit unions because processing mobile transactions require a fraction of the cost as a trip to a teller line. This is good news for consumers because of unmatched levels of banking convenience (what could be more convenient than the palm of your hand?).

Impact on the branch
This evolution in how account holders are accessing their accounts is forcing financial institutions to take a hard look at their branch networks. Many are pulling the plug on offices where the decline in transactions has become so dramatic that the institution can no longer keep the lights on.

According to, after peaking in 2009, the number of branch offices in the US for banks and credit unions has dropped by more than 1,000 each year.

What People Want From Their Branch blog post SN [Compatibility Mode] 2017-05-02 15-22-42

Changing relationship
Don’t be confused. The fact that consumers are using the branch less and less for routine transactions does not mean that consumers value the service provided by the branch any less. They simply look to the branch for different things. They want to establish relationships with employees who can advise them on how to get from Point A to Point B financially.

Now, the bad news
Unfortunately, banks and credit unions are not keeping pace with consumer demands. Consumers, by and large, still perceive their relationships with financial institutions as transactional in nature — not consultative.

What People Want From Their Branch blog post SN [Compatibility Mode] 2017-05-02 15-21-04Source: Accenture, Banking Shaped by The Customer

The takeaway
If financial institutions don’t staff their branch offices with knowledgeable subject matter experts in all things money, consumers will go elsewhere for their financial solutions.

This is a threat all banks and credit unions should take seriously as Fintechs and other alternative lenders would love to fill the void.

And that would remove much of the “good news” from the “good news, bad news” scenario of today.