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Customer Engagement

The Rise of In-Store Branches

A man in a blue button-up.
Marc Healy, executive director of retail and marketing
5 min read
in-store branch
Reading Time: 5 minutes

What if you could meet customers and members where they are instead of relying on them to visit your primary branch location for each interaction? Over the past twenty years, financial institutions have been doing just that by incorporating in-store branches into retail spaces.

These in-store branches can play an important role in extending your brand and engaging with customers or members. Read on to learn more about in-store branches and what they bring to the table.

What Is an In-Store Branch?

An in-store branch is an in-store extension of a larger primary financial institution. Also known as micro branches, pop-up banks, or small footprint banks, they are often found inside supermarkets and other large retail outlets. In-store branches provide a convenient way for financial institutions to boost customer interactions, expand their brand, and save money.

Though smaller and operated by fewer employees, in-store branches are equipped to provide most traditional banking services, including deposits, withdrawals, account setup, auto loans, mortgage programs, and more.

In-store branches have the potential to go beyond carrying out routine transactions to become new acquisition centers, where tellers act as universal agents who can handle and advocate for more in-depth financial services.

Since most shoppers visit grocery stores once or twice per week, in-store branch employees can get to know customers and members more intimately. Because these individuals have more opportunities to engage with the customer or member base than traditional branch tellers, they can become advocates for the brand and make suggestions based on their frequent interactions. In this way, in-store branches can also serve as an extra marketing tool for the financial institution.

In addition to providing more personalized customer service and enhanced brand marketing, in-store branches are also cost-effective. It costs significantly less money to build an in-store branch than it does to purchase or build and staff a full-sized branch. This also makes the entry point much easier to expand into new markets that have not yet been firmly established.

For example, in an underserved area, it would be a smart strategy to open an in-store branch inside of a popular grocery store instead of investing large sums of money into a large, standalone branch. This allows financial institutions to test the waters before making a large commitment. On the whole, in-store branches offer a low-cost way to extend services while negating the expenses of a large building and staff.

What’s the Difference Between an In-store Branch and a Full Size Bank?

There are several key differences between a in-store branch and a full-sized branch, including:

  • Operating hours
  • Convenience of location
  • Customer interactions
  • Construction and operating costs

In-store branches meet customers and members where they are. While most primary branches operate between 9 a.m. and 5 p.m., self-service functions of in-store branches are open as long as the host store is open. Customers and members can handle their financial transactions before or after their weekly grocery buying trip instead of having to make multiple stops and rush to the bank or credit union before it closes.

Unlike large branches, in-store branches offer more opportunities for customer or member interactions with agents. Universal agents can get to know their member base on a more personal level, and in the process, determine which financial services could provide the greatest benefit. On the other hand, some in-store branches are teller-less and utilize ATMs and ITMs to carry out most of the services of a traditional branch.

Additionally, in-store branches are more cost-effective than larger branches, as they do not require a standalone building and can be managed by fewer employees. On average, in-store branches cost only 50–60% of the operating expenses incurred by full-sized bank or credit union branches.

How Customers’ Changing Preferences are Driving the Popularity of In-Store Branches

With the rise and popularity of one-stop shopping centers like Wal-Mart, Target, and even discount retailers, it is no surprise that bank and credit union customers and members enjoy this type of convenience as well. By utilizing in-store branches, financial institutions can expand their brands into the retail space, thereby providing in-store solutions for customers and members who otherwise may not make a special stop at the primary branch location.

Additionally, many customers and members prefer to do their banking outside of regular business hours. Banks and credit unions can better satisfy this customer desire through in-store branches that remain open after 5 p.m. and that offer ATM and ITM services at all hours.

Best Practices for In-Store Branches

When considering best practices for small footprint banks, it really comes down to three key factors:

  • Technology
  • Location
  • People

Utilizing the latest banking technology is crucial to meeting customer demands and establishing your credibility as a modern financial institution. In-store branches should be well-equipped with virtually the same technology you would expect to find at a full-sized branch. This includes ATMs/ITMs and video banking options.

It’s also important for banks and credit unions to select the right stores for their in-store branches. Ideal locations are those preferred by the most people and include stores that see heavy foot traffic each day and are located in an easily accessible area. In-store branches have been shown to perform well when situated in areas where customers and members need to withdraw cash, such as in supermarkets, shopping malls, and department stores.

Finally, hiring and training the right people can be a game-changer for the success of your small footprint bank or credit union branch. The universal agents who work in in-store branches should be both conversational and consultative. They should believe in the concept of small footprint banks and understand how to educate customers and members on the many benefits of using an in-store branch. These agents need to be willing and ready to engage with shoppers, getting to know them more with every interaction.

In-store branch locations offer financial institutions the opportunity to meet customers and members where they are, boost their customer or member base, expand their brand, and save money overall. If you’d like to learn more about in-store solutions and small footprint banking, contact our team today.

FAQs about In-Store Branches

How can FIs maintain a personal connection with customers/members despite the rise of online, digital, and teller-free banking options?
FIs can maintain outstanding customer service by making their interactions more personal. Tellers working at a in-store branch have the opportunity to see customers on a weekly basis (or more often) and can use this time to learn more about customer needs and preferences. Small footprint bank and credit union agents can educate customers and members on the benefits of banking with them and ensure their customers and members are getting the best deals on their financial services and accounts.

What kinds of new technologies will provide the greatest long-term benefits for banks looking to add in-store branches?
ATMs and ITMs offer great long-term benefits in in-store branch locations. Since there are fewer tellers than at full-sized banks, automated and interactive teller machines can help offload simple transactions and allow agents to spend more time with customers who need more in-depth financial services. ATMs and ITMs may also be available after hours.

How can FIs merge self-service transactions with outstanding customer service?
Financial institutions can maintain a high level of customer service, even via self-service transactions, by ensuring that the technology works, is modern and up-to-date, provides the customer’s preferred service options, and is available on demand.

What considerations should be taken into account when planning for new in-store branches?
The three key considerations financial institutions should consider when planning for a new in-store branch include technology, location, and people. FIs should choose a popular store that sees heavy foot traffic, hire and train agents who will advocate for the in-store branch, and utilize technology like ATMs and ITMs.


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A man in a blue button-up.
Marc Healy
executive director of retail and marketing

Often greeted by the team as “Mr. HEALY!,” with all suitable pomp, Marc is known to be a positive force of nature in the office. After graduating from Western Washington University with a degree in Business and a concentration in Finance, Marc proceeded to leap right into leadership positions. His career now spans over 35 years, with experience in marketing, sales, and finance.


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