Why the Most Advanced Banks Are Rethinking the Role of the Branch Beyond Real Estate
Over the past decade, most large banks have made more or less the same set of decisions: fewer branches, lighter formats, and greater reliance on digital self-service. Across the euro area, the number of bank branches decreased from approximately 186,000 in 2008 to around 106,000 in 2023, almost 42% fewer; in the United States, the decline over the same type of timeframe was more limited, around 19% between 2014 and 2024 (source: ECB, “The changing landscape of bank offices in the euro area”; Federal Reserve, 2025).
What is less frequently observed is the other side of this transformation: what has remained inside the branch is not what has moved away from it. The interactions that migrate to digital channels are those that do not require the physical presence of the bank. What remains in the branch are the activities that create relationships and value over time: advisory services for complex decisions, high-value products, and moments in which customer trust is built or lost.
A 2025 McKinsey survey indirectly confirms this shift: 74% of customers who still visit a branch do so because they prefer it, and only 12% do so out of actual necessity. The role of the branch appears to be changing faster than the branch itself.
Five Agendas on a Single Asset
The outcome is only apparently counterintuitive. Branches retain precisely the highest-value interactions, and network optimization has not reduced the strategic value of branches. It has concentrated it.
A smaller network is therefore not necessarily a less important network; for many institutions, it has become significantly more important.
Today, every branch is influenced by five different agendas, defined elsewhere and driven by their own specific logic. Customer strategy determines who is served and where. The distribution model defines what a customer can do and through which channel. Operations establish the standards through which services are delivered. Capital allocation determines where investments are directed. Technology defines the speed at which all of this can actually change.
Five agendas, five planning cycles, five different definitions of success, all converging at the same time on the same square meter.
For much of banking history, the network was a stable variable: it was simply where the bank was located. Today, it has become one of the places where decisions truly take shape, each according to its own cycle and its own measure of success.
A Shift in the Question
The most advanced organizations are learning to ask themselves a different question.
Not how efficiently we manage our buildings, but how much our network contributes to business performance.
Which locations create value, and which ones consume it? Are decisions regarding formats and territorial presence driven by customer data, or by negotiation timelines? Is capital allocated where performance justifies it?
These are business questions that emerge through a real estate lens — which is why they remain difficult to position within an organization where each of the five agendas responds to its own logic.
The answer starts precisely from there: the same five agendas that today converge separately on the network — customer strategy, distribution, operations, capital and technology — can be viewed together as five dimensions of the same performance, rather than as five competing requests.
It does not require an additional tool: it requires a different perspective, capable of looking at the network not only in terms of the cost required to manage it, but in terms of how much it contributes to the bank’s overall results.
This is the principle behind eFM’s collaborations alongside financial institutions on this topic. A journey that often begins with a single question: what does it mean, in practice, to govern five agendas as a single performance?
A New Governance Discipline for Banking Real Estate
Branches, operational hubs, and headquarters can become a driver of performance—not just a cost to manage.
Are we measuring the right performance across our network? It is a question every CEO and Head of Retail should be asking more often—and one that is rarely answered by the metrics the banking industry still relies on to assess the value of a branch or operational site: cost per square meter, occupancy rates, energy consumption, lease expirations. These are robust, carefully developed metrics that accurately answer the question they were designed for: how efficiently are we managing our real estate portfolio? For years, the industry has answered that question well, delivering tangible savings even under significant operational pressure.
The challenge is that this question has become narrower than what the network represents today. This is not a matter of capability, but a natural gap between tools designed to manage buildings and an asset that has evolved into something far more strategic: “…a platform through which a bank delivers a significant part of its strategy—growth, customer relationships, capital allocation, and overall business performance.”
From Portfolio Management to Network Performance
The key distinction lies between two different ways of looking at the same asset. Portfolio Management focuses on what already exists: optimizing costs, ensuring availability, managing contracts, and maintaining compliance. It is an essential discipline—and one that has reached a high level of maturity.
Network Performance takes a different perspective. Rather than optimizing the existing footprint, it shapes what the network should become. It treats decisions about locations, formats, and investments as business decisions rather than real estate decisions, evaluating them across five interconnected dimensions that, in most banks, remain siloed: financial performance, operational performance, sustainability, risk management, and business and customer performance.
Real Estate owns the assets. Retail owns the customer relationships. Finance owns the capital. Each function performs effectively within its own scope, yet none of them, in isolation, can determine whether a specific location is creating or destroying value for the bank as a whole.
A New Governance Discipline
eFM defines this approach as Business-Driven Digital Governance: business-driven because it starts from the bank’s strategic objectives rather than from the assets it manages; governance because it is not a time-bound project, but a structured way of making decisions about the network—who makes them, based on which data, and how frequently.
Over the years, the market has developed different responses to this complexity, each rooted in a specific area of expertise. Technology platforms and software providers have made information accessible and transparent. Property and facility management providers have delivered scale and operational efficiency by taking over day-to-day management. Strategic consulting firms have brought rigor in defining long-term direction. These are all mature approaches, each addressing a genuine business need.
eFM brings strategy, data, and processes together into a single decision-making framework while allowing banks to retain full ownership of their decisions: not a project with a defined end date, but a governance model for managing change over time.
What It Looks Like in Practice
In organizations where this approach takes hold, change rarely begins with a formal transformation program, and it does not start with technology. It starts with three fundamental steps. The first is bringing together customer, operations, finance, and real estate data into a single, shared view accessible to all relevant functions. The second is agreeing on a common definition of network performance—more challenging than it sounds, because it requires making explicit the real purpose of every location. The third is establishing a governance rhythm in which decisions about the network are made collaboratively, based on the same evidence, rather than sequentially according to individual budget ownership.
The most immediate outcome is better, faster decision-making: determining which locations deserve investment, which formats should be scaled, and where capital should be reallocated to generate greater value for customers. Cost efficiencies follow naturally as a consequence—not as the primary objective.
The physical network is no longer simply a cost to contain or a portfolio to optimize. It is where a bank’s strategy truly meets its customers, and assessing its performance across five dimensions—not just one—is the new way to understand whether it is delivering results: financial performance, operational performance, sustainability, risk management, and business and customer performance.
The question, then, is no longer whether the banking network must evolve. It is whether the governance models we continue to use to manage it are still adequate for the challenges banks face today.