Phygital Banking: Future of Branches and ATMs

Introduction

Despite the many advances in digital and online banking, in-person interactions remain an integral component of cardholders’ banking experience. In-person banking creates a closer relationship between financial institutions (FIs) and their cardholders through more personal experiences. For FIs looking to optimize their relationship with their account holders, advances in digital technology are not used to replace the in-person service, but to improve it. Phygital banking – the blend of digital tools with in-person banking – creates an experience that is more enjoyable for new and existing cardholders, and more efficient for the FIs that serve them.

Importance of Phygital Banking

Phygital banking provides cardholders with the flexibility to bank in a way that is easiest for them, such as having the ability to start a new account application in-person with a branch representative and finish it at home on a mobile device. Touchpoints between FIs and their account holders blend seamlessly to service them wherever they are in their financial journey. Phygital banking streamlines in-person interactions by replacing manual processes with digital ones, saving time and ensuring in-person interactions are efficient. This allows branch representatives to spend time on more complex, high-value interactions, such as new account acquisition or cross-selling.

FIs can use phygital banking to cast a wider net for acquiring new cardholders and servicing existing ones. Younger, more tech-savvy consumers are able to take advantage of innovative digital technology, while less-tech savvy ones can appreciate being serviced in-person and being gently ushered towards digital. Phygital solutions also improve accessibility for people with disabilities or those in underserved areas. Features such as voice-enabled ATMs, multilingual support, and remote video banking allow for FIs to build trust and expand their cardholder base while demonstrating a commitment to accessible financial services.

Digital technologies can also be integrated with in-person touchpoints to educate cardholders about their finances and the solutions offered by an FI, which can improve credit scores and borrowing behavior. In-person interactions help cardholders build a greater sense of financial security, and as cardholders develop a greater understanding and confidence in financial products, FIs can more efficiently cross-sell those offerings.¹

Forward Looking Trends

By combining digital innovation with personal service, phygital banking delivers a richer, more efficient experience. For example, to ensure the in-branch visit goes as smoothly as possible for an existing cardholder applying for a loan, FIs can leverage pre-in-person digital interactions. These interactions may involve asking the cardholder to download the mobile app where they’ll be able to manage their loan payments, review linked educational material or fill out a form that a branch employee can review prior to the meeting.

During in-person sessions, technology can be leveraged by branch representatives and relationship managers to recommend best product fits, or to ensure smooth completion of routine documents, leaving more time for quality conversations. FIs can also leverage time in-person with the cardholder to educate them on digital solutions, such as walking them through how to download and navigate the FI’s mobile app. Post-in-person digital touchpoints are also important, using text, email, and online portal communication to summarize meeting content and detail next steps for the cardholder.

Digital integration in the in-person banking experience extends beyond meetings with branch representatives, and can include card-less cash withdrawals, QR codes and text check-ins used in-branch to eliminate waiting in line, adaptive AI and biometrics to confirm cardholder identity, and video calls with FI representatives.

Considerations

Phygital experiences require a strong understanding of the cardholder journeys at play, as FIs must identify pain points before solving for them with a blend of technology and guidance from account holder-facing representatives. By understanding what channels cardholders use, as well as their goals, FIs can integrate digital solutions in a way that best serves them.

While digital integration looks to make the banking experiences more seamless, implementing the required technology is a challenge as FIs face upfront costs of investing in technology and workforce training, as well as data privacy and security risks. To ensure phygital integration is successful, FIs will have to evaluate key performance indicators. This may include monitoring accounts opened, reduction in wait-times, reduction in self-service issues raised with help desks and call centers, or adoption of digital tools. Despite the integration costs associated with phygital banking, 70% of financial Chief Experience Officers (CXOs) planned to increase digital transformation investments by up to 10% in 2024.²

TransFund’s solutions can be used by FIs looking to cement themselves in the phygital world. Whether it be instant card issuance, card control apps, contactless payment options, high tech ATM equipment, or integrated APIs for digital card issuance, TransFund’s solutions allow FIs to combine the latest technology with human experience and expertise to service cardholders effectively.

Conclusion

Phygital banking represents the future of cardholder engagement for FIs by blending the efficiency of digital tools with the trust and credibility of in-person interactions. It allows FIs to meet evolving consumer expectations, streamline operations, and expand their reach across different demographics. TransFund’s suite of solutions, from instant card issuance to ATM technology, empowers FIs to deliver a modern, phygital experience without compromising on security or service quality. By combining cutting-edge technology with deep industry expertise, FIs can bridge the digital-physical divide and meet cardholders wherever they are.

Sources:

1. Capgemini, Top Trends 2025; Retail Banking
2. Capgemini, World Banking Report, 2025