As routine transactions move to digital channels, credit unions can use branches for account opening, financial guidance and other interactions that require more personal assistance.
The scenario takes shape amid the apparent disconnect in how Gen Z uses physical banking. Just 28% of Gen Z consumers prefer receiving financial advice in person, compared with 46% who prefer online guidance. Yet when Gen Z consumers receive personalized guidance during an in-branch conversation, 76% say they will act on it, according to research cited in the PYMNTS Intelligence Credit Union Tracker, “The Branch Changes Jobs: How Credit Unions Are Reimagining Physical Banking,” done with Velera.
The 28% figure captures channel preference for financial advice. The 76% figure measures stated action following personalized guidance when an in-branch conversation occurs. The data therefore does not show that Gen Z broadly prefers branches for advice. It shows that the advice delivered there can have value even among consumers who generally prefer another channel.
Visits and teller transactions capture how often customers use a location. They don’t necessarily capture what a credit union accomplishes when a member comes through the door.
Credit unions are already changing branches in ways that line up with that use case.
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Among credit union executives planning to repurpose existing branches, 76% intend to convert them into advisory hubs, according to Wipfli research cited in the Tracker. Another 64% are enhancing ATM capabilities, allowing routine transactions to move toward self-service while branch space is used for financial consultations.
The operating model follows the same logic. Digital tools and ATMs can absorb balance checks, transfers, withdrawals and other routine activity. The report says that can free branch employees to devote more attention to conversations that technology cannot easily replace.
Gen Z provides a useful test of that model because its branch use is selective. Sixty-five percent prefer opening new accounts in person, despite their familiarity with digital banking. The same consumers are less likely to prefer in-person financial advice overall, suggesting that physical banking becomes more relevant around particular tasks and decisions.
A Different Branch Scorecard
The Tracker specifically recommends evaluating branch success through relationship outcomes instead of transaction volume, including member engagement, financial guidance delivered and long-term relationship growth. It also recommends repurposing branch space around advice, education and community engagement.
The approach is already showing up in network planning. Sixty-two percent of surveyed credit union executives plan to open new branches and 58% intend to repurpose existing locations, while 18% anticipate closures.
Even decisions about new locations aren’t based solely on transaction volume. Credit unions planning branches cite digital adoption rates at 63%, operating costs relative to revenue at 55% and younger-member growth at 47% among the factors shaping those decisions.
For credit unions, then, declining dependence on the teller window doesn’t necessarily mean declining branch value. The Gen Z findings point to a narrower role for physical banking, with the branch earning its place when an in-person interaction leads to useful financial guidance and subsequent member action.
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