Ever since routine, transactional banking started moving to smartphones and laptops, banks have been reimagining the role of their branches. There’s no question the branch is still a focal point for relationship banking, but how does it fit within a larger ecosystem—especially alongside those all-important digital experiences?
The industry has started calling this blend of physical and digital banking “phygital,” an awkward word for a real consideration. The challenge for community banks is making both experiences feel like they come from the same bank.
The first imperative is that community banks must provide seamless access. A trip to the branch should happen because the customer wants to speak to a bank employee, not because online banking was a cumbersome experience.
“Most customers don’t make that choice [between physical and digital],” says Allyson Twiggs, founder of The Twiggs Group, a community bank marketing agency in Fayetteville, Arkansas. “They choose based on the task they’re trying to accomplish.” This means customers might choose digital for convenience and routine transactions, and a branch for questions or more complex interactions, like applying for a loan.
Buckeye State Bank in Powell, Ohio, aims for a seamless feel by branding its digital account opening interface to match its branch experience. Customers who open an account through the “Buckeye Anywhere” online channel get a welcome box with either customer drinkware or a branded T-shirt—the same gift they’d get if they walked through the door of one of the branches. The $569 million-asset community bank follows up with a video call from the digital banking team.
“We try to create one experience that’s delivered based on the channel that the client takes,” says Shawn Keller, president and CEO. “The magic sauce is trying to figure out how to deliver community banking in a digital world. And that’s something we’re constantly poking at, trying to solve the Rubik’s Cube.”
Branch transformation: Build community bank technology into the Experience from the Ground Up
Banks that are building a new branch or renovating an existing one have a chance to fold in-branch technology into planning from the start.
“Banks aren’t necessarily asking us, ‘What technology should we put in the branch?’” says Kate Schmitt, marketing director at La Macchia Group, a bank branch design and build firm in Milwaukee, Wisconsin. “They’re asking, ‘How should technology fit into the experience?’”
Good technology in a branch should do two things, she says: It makes banking easier, and it helps employees serve customers better. Starting in 2018 at Buckeye State Bank’s Powell, Ohio, location, that shift has shown up with fewer teller lines and a more conversational pod-based branch design. Screens throughout the branch also display products and digital capabilities as conversation starters.
“We’re establishing that you don’t have to sacrifice technology to bank with us,” Keller says.
What is the ideal bank branch experience in an omnichannel, phygital era?
According to La Macchia Group’s 2026 State of the Financial Consumer report, 45% of people surveyed described their preferred in-branch experience as “coffee shop/cafe.” As much as they might want a branch to feel polished and professional, they also want it to be comfortable and approachable.
In the same report, consumers were asked if they preferred in-person banking to online banking experiences. Among people aged 30 or older, more than half prefer in-person banking. The number is even higher for Gen Z, with 64% of respondents age 18–29 stating a preference for in-person banking.
As this survey shows, digital channels have not eliminated the need for face-to-face interaction, and it’s not enough to simply provide “good” digital experiences and “good” in-person experiences. A phygital-first bank looks at how customers navigate between the two.
Source: La Macchia Group
One important role of Buckeye State Bank’s in-branch frontline staff is to help people who might not be comfortable with the technology on offer. Tablets are available for hands-on demos, and staff take the time for tutorials and to answer any questions.
But there’s more to a modern bank branch than technology. For banks considering in-branch upgrades, a few changes—like updating lighting and furniture or removing physical barriers between employees and customers—can transform a space.
“The branch should be designed to make conversations easy,” Schmitt says. “That means welcoming spaces, privacy, comfortable places to sit down together, access to specialists, and technology that supports the conversation without getting in the way of it.”
Omnichannel banking in practice: Create a smooth customer handoff between digital and branch
While community banks might put a lot of effort into both digital and physical experiences, a friction point often happens at the transition between the two. A handoff has to feel like a continuation of the same conversation.
“If I start a loan application online and then walk into a branch, I shouldn’t feel like I’m starting over,” Schmitt says. “The employee should understand where I am in the process, what information I’ve already provided, and what needs to happen next.”
To customers, digital and physical are simply one relationship with one bank, and that runs in both directions. “The relationship shouldn’t only exist when someone walks through the front door,” Twiggs says. “A customer using the mobile app should still feel like they’re banking with people who know their community and are available when they need them.”
Keller notes that in the past, customers would often come into the branch if they had a question about a digital experience or got “stuck,” but at Buckeye State Bank, employees can handle digital support over the phone or by video chat. A lost debit card used to mean a branch visit for a replacement; now an employee can push a new card straight into a customer’s Apple Wallet. If a customer hits a mobile app error, staff can screen-share instead of asking them to come in.
Photo courtesy of Buckeye Bank
Phygital banking works when relationship stays front and center
Community banks that get the phygital balance right use physical and digital in a way that makes each channel stronger, with digital handling convenience and the branch providing a personalized experience.
Keller sees this balance as a structural advantage for community banks.
“In some cases, we have better technology, because we are smaller and we can be nimbler,” he says. “But we never lose sight of the fact that relationship is the cornerstone, whether the client prefers a digital experience or an in-branch experience. A personal experience has to be injected somewhere, even in a digital world.”
How digital tools give bankers more time for relationships
When many routine transactions like check cashing and deposits moved to digital channels, the Friday afternoon teller lines at Buckeye State Bank in Powell, Ohio, disappeared, and so did the pressure to move through as many customers as quickly as possible.
“When folks do come in, and they have questions about technology or anything else, we actually have the time to spend with them,” says Buckeye State Bank president and CEO Shawn Keller. “More so than we had when we were just trying to transact and ‘Let me get to the next client that’s got a check to cash.’”
The community bank now uses the extra time to do things like walk new customers through a full mobile app setup before they leave the branch, making sure they’re comfortable with every tool available.
Keller also believes customers want answers immediately, whether online or in-person. With so many online and self-service options, freed-up bank staff can be available to meet customer demand for instant information.