Canadian banks and credit unions must transform branch networks to meet evolving customer needs
While most Canadians rarely visit branches, they strongly support maintaining them, highlighting the need for financial institutions to rethink and transform their branch networks.
A recent KPMG in Canada survey reveals a growing disconnect between how Canadians value their bank and credit union branches and how often they actually use them. While most Canadians rarely visit branches, they strongly support maintaining them, highlighting the need for financial institutions to rethink and transform their branch networks.
The survey of 2,058 Canadians found that three-quarters of respondents rarely use bank or credit union branches, with nearly half (48%) visiting a branch only once or twice a year—or not at all. Despite this, 68% believe the current number of branches is necessary, reflecting a desire for the security of having a local branch available, even as they conduct most of their banking online or via mobile devices.
"This paradox—valuing branches but not using them often—suggests that while branches still hold importance, their role must evolve," says Geoff Rush, Partner and National Industry Leader for financial services at KPMG in Canada. "To stay relevant, branches need to transform into spaces that offer more than just basic transactions."
The survey highlighted that the top reasons Canadians visit branches are for simple transactions like depositing or withdrawing money, with 53% citing this as their primary reason for a visit. However, as more advanced financial transactions move online, banks and credit unions face a challenge: how to justify large branch networks that are increasingly underutilized.
Rush suggests that financial institutions should explore innovative models, such as co-shared banking hubs, hybrid service models, and digital-first approaches. "Financial institutions need to reimagine their branch networks, taking inspiration from global examples where branches have been streamlined without significant customer loss," he adds.
Interestingly, while many Canadians express loyalty to their financial institutions, with 73% saying they would remain with their bank or credit union even if their branch closed, over half (55%) are open to forgoing in-person banking entirely for a superior online or mobile experience.
As customer expectations shift, the survey underscores the need for a new vision for Canadian bank branches, one that balances digital convenience with the continued demand for physical locations. Financial institutions must carefully assess regional needs and preferences to develop the optimal mix of digital and physical services that will best serve their customers in the years to come.
Download the report on KPMG's website
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