India’s Branch of the Future: Enhancing Financial Inclusion, Fostering Deeper Customer Relationships

Reimagined India bank branch experience can enhance financial inclusion and literacy while fostering deeper customer relationships – new Capco study

BENGALURU, February 11, 2025 – India’s banks have the opportunity to capitalize on their expanding branch networks to deliver more ‘experiential’ forms of in-person banking to enhance financial inclusion, drive greater awareness and adoption of their products, and forge deeper and more valuable relationships with their customers, according to a new Capco study.

The new paper – India’s Branch of the Future: Reimagining Physical Banks – proposes a new concept for the bank branch designed around a free-flowing and personalized experience that integrates the physical with the digital. 

The key purpose of Indian branches today remains to facilitate transactions such as account openings and closures, withdrawing cash, organizing a demand draft, taking out a loan, making deposits and checking balances. However, most of these transactions can now be more efficiently accomplished online, while others can be automated in the branch.
 
Branches do remain critical to building and preserving trust, with Indian consumers retaining a strong preference to visit branches for various interactions.¹

The shift from the current ‘transactional’ model is informed by three imperatives:

• Personalized – Millennial and Gen Z customers want branches that offer the welcoming, open ‘experiential’ format pioneered outside the banking industry by leading global retail brands such as Apple, Nike and Samsung, where they can explore and learn through more relaxed, engaging and personalized experiences.
• Community-driven – India’s branch of the future will serve as a more informal community hub offering trusted financial advice, knowledge and services. It can act as a ‘town square’ and host in-person gatherings, such as the business networking that young entrepreneurs and local businesses desire. 
  
• Educational – Financial literacy and improving how individuals approach financial well-being throughout their life are key priorities for the nation. Branches can leverage their physical presence by hosting focused events and workshops to promote financial literacy and wellbeing, and help both younger and older customers to become digital natives.

In addition to the branch layout, branch location and technology integration, the levers of change include measures to steer customer behavior, refocus staff, and develop a flexible approach: 

• Help customers move to self-service for low-value transactions. Branches need to improve the customer experience and cut costs by accelerating the shift towards automated self-service.
  
• Grow higher-value activities and personalized services. Tech-enabled branch staff, equipped with 360-degree views of customers, will be empowered to assist clients in more meaningful, higher-value ways. 
• Recognize the need for a tiered, flexible approach. The branch of the future should be tailored to its locality, community and target segments around evolving customer habits and preferences.   

Dipanjan Naha, Partner & Head of India Market: “Customer segments, habits and preferences continue to evolve in an increasingly digital world. To prepare for the transition to the branch of the future, India’s banks need to begin by asking themselves key questions about the role they want their branches to play, and how this resonates with trends in customer behavior. 

“Banks also need to consider the physical formats, footprints, technology integrations and change management programs that will help them equip branches to attract, engage, educate and retain their target customers. Once they have developed the right strategy, they can begin transforming physical branches to offer engaging banking experiences that are more closely tailored to the emerging needs of both individuals and local communities.”

About Capco
Capco, a Wipro company, is a global management and technology consultancy specializing in driving transformation in the energy and financial services industries. With a growing client portfolio comprising of over 100 global organizations, Capco operates at the intersection of business and technology by combining innovative thinking with unrivalled industry knowledge to fast-track digital initiatives for the energy, banking and payments, capital markets, insurance, and wealth and asset management sectors. Capco’s cutting-edge ingenuity is brought to life through its award-winning Be Yourself At Work culture and diverse talent. To learn more, visit www.capco.com or follow us on LinkedIn, Instagram, Facebook, and YouTube.

Contact
Tim Steele, Global Head of Content and External Communications
tim.steele@capco.com

¹ https://economictimes.indiatimes.com/industry/banking/finance/banking/majority-of-indians-turn-to-physical-bank-branches-to-resolve-issues-survey/articleshow/102285977.cms?from=mdr