Optimizing the Customer Experience in the Face of a Branch Consolidation

By Laura DeLaCruz, Director of Project Management and Business Development

The number of bank branches in the United States has been falling for years. Ten years ago, the FDIC reports that there were 95,000 branches, compared to 83,000 in 2019 (source: FDIC.gov). There are myriad reasons for closing locations, such as consolidations related to merger activity, banks leaving a geography, unprofitability and expiring leases, to name a few.

At the same time, banking habits have changed dramatically in recent years due to an increase in online and mobile banking usage for routine transactions, with customers visiting branches only for higher value interactions with branch staff, such as financial advice and guidance. The current pandemic has further accelerated the shrinkage of branch banking as customers have more aggressively adopted digital alternatives.

Regardless of the reason for a branch closure, careful attention must be paid to the customer experience during this time in order to minimize disruption and maximize retention. In a world where branch consolidations are inevitable, here are some tips for making it easier on your customers.

Customer communication is key.

Banking regulations stipulate that banks must notify customers in writing at least 90 days before closing a branch. However, you can turn that compliance necessity into an opportunity to frame the closing in the best possible light while providing the necessary information. Consider the following:

• Briefly explain why the branch is closing in your customer communications. If accounts are being moved to a nearby office, list the receiving branch’s address, phone number and branch manager name to make it more personal. If there are alternate locations nearby, provide the address of those locations too.
• Remind customers of your bank’s digital and telephone banking offerings as an alternative way to bank.
• Consider using a sidebar in your communication to pull out the key dates and new branch information- this not only helps keep the letter shorter, but it also provides a skimmable set of important “need to know” information.
• Highlight any advantages, including new amenities at the receiving branch. These might include a more spacious, full-service facility with walk-up ATM service, safe deposit boxes, ample free parking and/or a drive-up teller; use bullets to draw the reader’s eye to this helpful information.
• Include information about branch employees who will be relocated to other local offices if possible. This goes a long way to keep those customer relationships strong.
• Consider multiple reminders to affected customers with safe deposit boxes. If the contents of customer boxes must be removed by a certain date, include this information in the 90-day branch closing notification and follow up with an email reminder 60 days prior to closing. A letter sent via Certified Mail at the 30-day mark can provide proof of notification, or customers can be called by branch staff at that time provided the quantity is manageable.
• Include customers who transact at the closing branch, even if their accounts are not domiciled there, if the data is available.
• Consider who should sign the letter; depending on the bank, this could be the director of retail banking, a regional president or the current branch manager.
• Use the bank’s brand voice in the communications.

Multiple touchpoints will help ensure no customer is caught by surprise.

• Post signage on the branch doors and drive-up teller windows as early as possible to inform and remind customers (and non-customers) of the upcoming closing. This is another opportunity to let your brand shine by using brand colors and fonts for a professional appearance. Consider including a map of nearby branch locations and keep the sign posted even after the branch has closed.
• Use take-ones and teller handouts with each transaction as a high-touch way to discuss the closing with branch users.
• Consider personal outreach to high-value personal and business customers. This is especially important if branch staff from the closing branch are being transferred to the receiving branch- the continuity in personal service may help customers feel more comfortable during the transition.

Closing a branch is never a good thing from the customer’s perspective. Many people find  changes in their routine challenging, and using a different branch may not be convenient for them. But following these strategies for smart communication may help mitigate negative impacts and increase retention in the long run.

MKP communications inc. is a New York City-based communications company specializing in financial services marketing and merger/change communication.