If you lead a community bank or credit union, you already see how quickly retail banking is changing. Customers and members expect seamless, omnichannel experiences. Now, not only do they compare your institution to other banks and credit unions, but to the countless brands that impact their daily lives. The bar is high and getting higher.
This guide outlines the most important banking challenges for 2026 and offers practical actions your leadership team can take to elevate the experience, strengthen brand alignment, and deliver on the promise of a modern retail strategy.
Anyone leading a community bank or credit union in 2026, can see how quickly the retail banking industry is changing, and how essential it is to adapt.
💡 Looking for a partner to help meet your goals? Let’s talk strategy. Element helps community banks and credit unions compete with national chains. Our team can help with planning, execution, and training.
Execution of a Retail Mindset to Improve Consumer Experience
1. Executing a retail mindset
In 2025, The Element Group and our clients focused on adopting a retail mindset: Stop thinking like a banker. Start acting like a retailer.
In 2026, the challenge shifts from adoption to execution.
A true retail mindset means moving beyond transactions to create dynamic branches that deliver consistent, human-centered service. It turns branches into neighborhood financial centers where people trust, feel welcomed, and return to.
Executing this mindset requires clear decisions about your branch network, your staffing model, and the role technology plays in supporting the human experience. It also requires alignment across every touchpoint, so your brand feels unified and intentional.
Simple execution wins from the retail world:
- Offer well-timed recommendations based on life events.
- Align marketing, retail, IT, and branch teams so the omnichannel experience is truly seamless.
- Use technology to remove friction, not to replace people.
- Keep your messaging and merchandising fresh, just as retailers refresh their displays.
A retail mindset goes far beyond showcasing products. It’s about engineering memorable, relationship-driven experiences inside your branches.
👉 Recommended reading – What is Branch Merchandising? Our Tips for Adopting a Retail Mindset.
2. Evolving customer and member expectations
Customer expectations continue to rise faster than many institutions can adapt. People expect speed, personalization, and continuity across every channel. That gap between expectation and reality can be a liability, but we see it as an opportunity.
The question for executives isn’t whether expectations have changed. They have; it’s whether your team, technology, and branch are aligned to meet those expectations in real time.
Leadership actions that move the needle:
- Clarify the value of the branch. Define when and why customers should visit the branch, and shape the environment around advisory conversations, not transactions.
- Set higher service expectations across channels. Mobile, online, and in-branch experiences must feel connected. Inconsistency will erode trust.
- Prepare staff for context-aware interactions. Advisory conversations should reflect what the institution already knows: life stage, recent behavior signals, and activity across channels. By surfacing existing knowledge, employees directly support an omnichannel experience.
The institutions that succeed in 2026 will be the ones that focus on customer needs to shape their experience.
3. Strengthening omnichannel alignment
Many institutions say they are pursuing an omnichannel strategy. Fewer still have built the operational alignment required to deliver one.
Customers and members expect to move between mobile, online, and branch interactions without repeating information. When channels don’t share data, the experience breaks quickly.
True omnichannel alignment gives every channel access to the same real-time context. The branch becomes part of the ecosystem, not an island.
Leadership priorities:
- Give staff access to shared data. Branch employees should see recent activity and be able to pick up any interaction without re-asking the basics.
- Close the digital-to-branch gap. People still prefer to open accounts, discuss mortgages, and handle complex needs in person. The branch must support these moments with an understanding of a customer or member’s current status and history with the institution.
- Balance efficiency with humanity. Over-automation alienates people. Digital tools should enhance the human experience, not replace it.
Omnichannel is not a technology project. It’s an experience project.
4. Bringing people back into branches
Mobile banking has not eliminated the need for branches; it has clarified their purpose.
People walk into branches for meaningful conversations: financial decisions, problem solving, clarity, and reassurance. When they do, they expect a welcoming environment and staff who can guide them with confidence.
Leadership actions that elevate the in-branch experience:
- See the branch as an extension of your brand. Both the physical environment and human capital are the strongest, most memorable representations of your brand.
- Define the purpose of every visit. Promotions are not enough. Build moments that encourage guidance, planning, and problem resolution.
- Design for advisory moments. Flexible meeting areas, digital signage, navigation cues, and modern ITMs support the flow of human conversations.
- Prepare staff for high-value interactions. Advisory skills, not transactional accuracy, now define quality of the in-branch experience.
- Integrate technology without overwhelming the space. Screens and tools should support, not overshadow, the human moment.
A branch visit is now a high-value opportunity. When the space, tools, and people are aligned, the branch becomes the clearest proof of your institution’s commitment to service.
5. Utilizing smaller spaces that still provide a great experience
Branches are getting smaller, but expectations are not.
Driven by rising land and construction costs, increased digital adoption, and better design practices, branch sizes continue to drop. Where 4,000 square feet was once common, we now see high-performing branches at 2,000, and sometimes as little as 750 square feet.
A smaller branch is not a compromise. It’s a strategy.
Start with strategy, not square footage
A functional small branch begins with understanding the institution’s operations: technology, staffing, advisory needs, drive-up expectations, back-of-house requirements, and customer flow. When you know how the branch must function, you can design a right-sized footprint that supports it.
Key design principles for smaller branches:
- Lighting: Natural light and thoughtful fixtures make spaces feel open. Glass walls maintain privacy without creating visual barriers.
- Organization: Purpose-built storage and clean wiring systems keep the environment professional.
- Digital messaging: Digital signage creates limitless storytelling in spaces where wall real estate is limited.
- Materials: Light finishes expand the visual footprint, while contrast and organic shapes create depth and warmth.
In our experience, small branches succeed when design, technology, and staffing work as one.
A Human First Approach in a Tech-Forward Age
6. Rethinking branch staffing
As branches become more advisory and less transactional, the staffing model must evolve with them.
Customers now walk in with questions spanning everyday banking, product details, and financial decision making. Institutions are responding by shifting away from traditional teller roles toward the universal banker model.
A universal banker isn’t a “teller plus.” They’re a frontline trusted advisor.
They welcome visitors, process routine transactions, open accounts, assist with loans, and guide people through decisions. Their blend of interpersonal skills, financial knowledge, and digital fluency makes them the most versatile role inside the branch.
Leadership priorities:
- Center the universal banker role. The model allows for efficient staffing without sacrificing depth of service.
- Train advisors, not task-doers. Universal bankers must understand products, tools, compliance, and customer behavior.
- Build digital confidence. Staff should easily navigate mobile platforms and help customers bridge online and in-branch activity.
- Elevate NPS and relationship building as core KPIs. Universal bankers define the branch experience more than any layout or technology can.
7. Moving from transactional to advisory roles
In a recent blog post, Marc Healy wrote,
“The branch is not a training ground. It is the frontline. It’s where people come to the branch to solve problems, make decisions, and seek guidance. For too long, frontline roles have been labeled as entry-level positions, and that mindset is holding institutions back. These positions require intelligence, empathy, and financial acumen. They require training, development, and a clear understanding that trust, not transactions, is the branch’s real value.”
Marc continues,
“Technology has taken ownership of routine tasks. Mobile banking handles deposits, transfers, and balance inquiries faster than any human can. We do not win on speed or efficiency anymore. We win on people. We win on connection. We win on trust.”
Yet, many institutions continue to invest heavily in branch redesigns, new technology, and updated branding, while failing to take the final step: preparing their employees to listen, teach, and serve as trusted advisors.
Core truths:
- Training for transactions is table stakes. Customer and members can perform basic tasks on their phones; they come to the branch for clarity and conversation.
- Retail banking is a full-contact sport. Staff should welcome visitors, walk the lobby, and ask deeper questions.
- Great service is advisory service. Helping someone improve their financial life is not selling, it’s serving.
- Mindset drives the model. Branches become high-value destinations when employees are trained to lead conversations with confidence.
8. Effective training that puts relationship building first
Training cannot stop at procedures or compliance. When someone walks into the branch, they are trusting your institution with some of the most personal details of their life. Income, debt, goals, and major decisions all surface in financial conversations. Employees need to feel confident asking thoughtful questions, understanding context, and creating a sense of comfort and safety.
Procedural training is not enough. Compliance training is not enough. Relationship training is essential.
The Element Group has evolved its training program to better prepare employees for real conversations: how to read situations, walk in a customer’s shoes, ask thoughtful questions, and guide people to informed choices. This is not sales training; it is trust training.
Relationship-driven training builds three essential capabilities:
- Comfort with personal conversations. Staff learn how to ask deeper questions in a respectful way that helps them understand the customer or member’s full financial situation.
- Confidence in guiding decisions. Employees practice how to support people through problems, new accounts, or loan decisions.
- Consistency across the team. Every visitor should receive the same high-quality, trusted experience.
The more understood someone feels, the more comfortable they feel sharing information, and the stronger the relationship can become.
Technology and Innovation
9. Integrating technology without losing the human experience
Technology has shifted routine transactions to mobile and online channels, but it has not eliminated the branch’s relevance. People still seek in-person clarity when decisions matter. Technology must support these interactions rather than compete with them.
Leadership opportunities:
- Strengthen digital tools that support in-branch guidance. The more prepared people are when they arrive, the deeper the in-branch conversation can go.
- Extend advisory access through video banking. Connect visitors with specialists across your network without losing the human element.
- Use ITMs to free staff for meaningful interactions. They move routine tasks out of the queue while still offering live assistance.
- Design the branch so technology amplifies connection. Tools should remove friction, guide visitors, and support staff.
Modern tools should allow your team to streamline simple tasks while protecting the human connection that defines in-branch service.
10. Using AI responsibly
AI is becoming more powerful and more accessible. Used well, it enhances decision making, identifies opportunities, and improves efficiency. Used poorly, it erodes trust.
Leaders need to approach AI with a clear strategy that protects the customer or member experience rather than replacing it.
Guidelines for responsible AI:
- AI is the assistant, not the advisor. It can surface insights and flag opportunities, but people guide the conversations.
- Protect the in-branch experience. Over-automation makes interactions feel transactional or impersonal.
- Empower employees, don’t overshadow them. When AI reduces routine tasks, staff gain more time for advisory conversations. That’s the win.
AI should empower your employees. When used responsibly, it frees employees to spend more time in the conversations that build loyalty. When overused, it risks turning personal financial guidance into a generic experience that feels no different from a digital-only platform.
11. Leveraging the institution’s data to make strategic decisions
Banks and credit unions hold extraordinary amounts of data, but strategic decisions still rely on instinct or habit. With margins tightening and expectations rising, data must become central to planning.
The goal is not to collect more information. It is to use the data you already have, to make smarter, clearer decisions that support growth and grow relationships.
Strategic opportunities:
- Use behavioral insights to guide branch investments. Understand how each location is being used by its customers.
- Identify unmet needs. Patterns in usage and product combinations reveal relationship opportunities.
- Inform staffing and training. Data clarifies which conversations your team needs to be prepared for.
- Support long-term planning. Demographic and market data help determine where to grow, consolidate, or redesign.
- Strengthen omnichannel performance. Data shows where friction exists between digital and in-branch channels.
Competition and Industry Pressures
12. Mergers and acquisitions
Mergers and acquisitions continue to reshape the banking landscape, especially among community institutions seeking to grow. But while M&A can strengthen an organization on paper, the real challenge begins after the deal closes. Two brands, two cultures, two branch networks, and two service models must become one.
Unifying the branch network is one of the most visible and operationally complex parts of any merger. Leaders must decide how to create a consistent experience across branches that may have been designed with entirely different philosophies.
Where Element directly supports M&A success:
- Unify the brand experience across all locations. Customers and members should feel immediate consistency.
- Prepare teams for new expectations and workflows. Training smooths integration and ensures service quality.
- Quickly right-size and modernize inherited branches. Bring varying locations up to a shared standard without overbuilding or a full renovation.
13. Responding to fintech-first solutions
Fintech companies continue to shape consumer expectations. They offer fast onboarding, instant approvals, and frictionless digital journeys. Community banks and credit unions cannot out-spend or out-automate these platforms, but they do not need to.
The real opportunity is to combine the best of digital convenience with the human expertise fintechs cannot replicate.
Fintech first solutions may win on simplicity, but traditional institutions win when they pair that simplicity with human trust that reassures people during meaningful financial decisions.
Leadership focus areas:
- Compete where fintechs cannot: the human experience. Fintechs excel at transactions. They do not excel at relationships. They cannot walk someone through a complex question, recognize confusion in real time, or give tailored advice during a major life event. Your branch network and your people are your competitive advantage, only if the experience feels modern, consistent, and welcoming.
- Use technology to remove friction. Simplify the journey so staff can spend time on guidance, not troubleshooting.
Strengthen your niche, not your feature list. Fintechs often compete on speed or novelty, but they cannot deliver comprehensive financial planning, local expertise, or the peace of mind that comes from a trusted advisor.
14. Navigating regulatory complexity
Regulatory expectations continue to grow, influencing how institutions design branches, train staff, and implement technology. While compliance may not be the focus of branch design, it touches every part of the experience.
For leaders, the challenge is building a branch and staffing model that can adapt to increasing complexity without slowing down the experience.
Leadership opportunities:
- Design branches that support secure, compliant operations. As new regulations emerge around data privacy and physical security, branch environments must support safe workflows, secure technologies, and layouts that protect sensitive information while still feeling open and welcoming.
- Prepare staff for sensitive conversations. Customers and members share some of their most personal details at the branch. Ensuring staff know how to manage those conversations with discretion, clarity, and care is critical to both compliance and trust.
- Select technology with future requirements in mind. AI, ITMs, video banking, and digital tools all introduce new requirements for security and data handling. Choosing the right solutions early prevents expensive redesigns and protects the customer or member experience.
Regulatory complexity will only increase. Proactive planning ensures compliance strengthens your institution rather than slowing it down.
Conclusion
The pace of change in retail banking isn’t slowing, and the institutions that succeed in 2026 will share one trait: move away from branches that are transaction centers and instead, focus on becoming trusted advisory hubs, brand anchors, and relationship engines. When design, staffing, technology, and training work together, the branch becomes a competitive advantage that digital tools cannot replace and competitors cannot eat away at.
If your institution is ready to elevate the experience, modernize your network, and build a retail strategy that strengthens loyalty for years to come, our team is here to help you get there.