Branch strategy isn’t dead—undifferentiated branches are. Here’s how to design AI-smart, member-centric branches that actually grow your credit union.
Most credit unions still treat branch strategy and AI strategy as two separate conversations. One is about buildings, layouts, and traffic counts; the other is about data, models, and digital experiences.
Here’s the thing about member-centric banking in 2025: your physical branches and your AI capabilities either support each other or they both underperform. There’s no middle ground anymore.
This post builds on themes from Kurt Klassen of LEVEL5—branch development, market strategy, and performance—but pushes them into the AI era. If you’re rethinking your branch network, remodeling a location, or wondering how AI fits into your member experience, this is for you.
We’ll walk through how to design a branch strategy that’s data-driven, AI-aware, and unapologetically member-centric—and how that approach turns branches from cost centers into growth engines.
Why Branch Strategy Still Matters In An AI-First World
Branch strategy isn’t dead; undifferentiated branches are. Credit unions that win treat branches as high-impact, high-touch extensions of a digital and AI-powered ecosystem.
Kurt Klassen’s challenge to “be great” is spot on here. Average branches are easy: copy-paste a floor plan, add a coffee station, and hope for walk-ins. Great branches require clarity:
- Who are we serving in this market?
- What problems are we solving in person that we can’t solve as well digitally?
- How does AI change what members expect when they walk through the door?
The reality? It’s simpler than you think: define the member journeys you want to support, then design both technology and space around them.
How AI raises the bar for branches
AI tools—chatbots, predictive analytics, personalized offers—have changed the baseline experience. Members now assume that:
- You recognize them and their context
- You know what they’re likely there to do
- You can move them quickly to the right person or solution
If your digital channels feel smart and your branch feels generic, members experience a jarring disconnect. Branch strategy has to catch up to AI-driven expectations.
Start With Markets And Data, Not Floor Plans
The best branch projects I’ve seen don’t start with architecture. They start with market intelligence and member behavior data.
Step 1: Understand your market at street level
Kurt talks about understanding markets before designing branches. In an AI-aware strategy, that means going beyond basic demographics. You want:
- Member density and growth by zip code and micro-market
- Commute patterns and workplace hubs near potential locations
- Competitive intensity (banks, fintech usage, and other CUs)
- Digital vs. branch usage patterns in that area
Feed this into an analytics or AI model and you can score potential sites on:
- Likely account growth
- Loan potential (auto, mortgage, small business)
- Service demand (transactions vs. advisory)
- Risk and fraud exposure
Branches should go where AI predicts meaningful, profitable relationships, not just where retail space is cheap.
Step 2: Map member journeys before designing space
Before you sketch a layout, define the top 5–7 journeys your branch must support, for example:
- Member onboarding and account opening
- Loan consults (auto, home, small business)
- Complex problem resolution
- Financial wellness coaching
- Small-business banking support
- Self-service transactions
- High-net-worth or SEG relationship management
For each journey, ask:
- What can AI handle before the member arrives?
- What should AI support during the visit (data, insights, prompts)?
- What should staff own 100% because it’s human, emotional, or complex?
Only when you’ve done that do you know if you need:
- More offices or more open consult spaces
- A large teller line or a small one plus ITMs
- Dedicated spaces for private financial wellness conversations
Designing AI-Enabled Branch Experiences
An effective branch today is AI-aware by design, not AI added as an afterthought.
Use AI to personalize in-branch interactions
AI for credit unions shouldn’t live only in the contact center. You can make the in-branch experience feel sharper and more personal with:
- Member insight dashboards at the associate’s workstation: a concise view of recent activity, life-event signals, and likely needs.
- Next-best-action models that suggest relevant offers or education topics during a consult.
- Risk signals that help staff spot potential fraud or account takeover while still providing a warm experience.
This is where physical and digital meet: the member books an appointment in your app, AI preps the associate with context, and the branch visit feels intentional rather than random.
Self-service that complements, not replaces, your team
Many credit unions overcorrect here—either they keep everything manual or they try to automate the entire lobby.
A better model is tiered service:
- Tier 0: AI assistant in your app or kiosk handles FAQs, wayfinding, and simple forms.
- Tier 1: ITMs/ATMs plus quick self-service stations for transactions.
- Tier 2: Universal bankers for everyday needs.
- Tier 3: Specialists for lending, business services, and wealth.
Your branch design should make it obvious where each tier lives. AI tools quietly route, inform, and support; humans handle the nuance.
Example: AI-informed branch consult
A member books an appointment for a “general financial checkup.” When they sit down:
- The banker’s screen shows an AI summary: age 34, stable income, rising savings, high rent payments, credit card balances trending up.
- The model suggests 3 focus areas: debt optimization, home purchase readiness, and emergency savings.
- The banker uses this as a starting point, not a script, and has a real conversation.
Same branch. Same staff. But AI turns a vague “checkup” into a focused, high-value interaction.
Aligning Branch Design With Service Delivery Strategy
A branch isn’t just a building; it’s your service delivery strategy made visible. LEVEL5 focuses heavily on this, and they’re right: design without strategy is expensive décor.
Choose your branch archetypes
Not every branch should look or function the same. Most high-performing credit unions define a small set of branch types, such as:
- Advisory hub: Larger footprint, more offices, located in growth corridors or affluent areas. Heavy focus on lending, business, and financial planning.
- Transaction-light micro-branch: Small footprint in dense areas, paired with robust digital and ITM support.
- Campus/SEG branch: Tailored to a specific employer or campus, with hours and design matched to that audience.
AI helps you decide where each archetype belongs and what mix of staff and technology each one needs.
Right-size staff with AI, don’t just cut FTE
A lot of branch projects quietly hide this goal: “reduce headcount.” That’s a mistake if you stop there.
What works better:
- Use AI to forecast visit volume and interaction types by hour and day
- Schedule and skill-match staff to expected demand
- Automate low-value tasks (forms, basic inquiries, routing)
- Redeploy people into advisory and relationship roles instead of pure transaction processing
Branches then shift from “how many transactions per teller hour” to “how much relationship value per staff hour.” That’s a healthier metric for a member-centric strategy.
Minimizing Risk While Amplifying Growth
LEVEL5’s promise—minimize risk, amplify growth—translates perfectly into AI-enabled branch strategy.
Where AI reduces risk in branch strategy
AI and advanced analytics can materially reduce risk in several areas:
- Site selection risk: More precise forecasting of deposit and loan potential.
- Fraud and compliance risk: Real-time monitoring of unusual in-branch activity tied to member profiles.
- Operational risk: Smarter staffing models that reduce burnout and service failures.
- Project risk: Scenario modeling of different branch formats before you build.
Instead of betting millions on intuition and vendor slide decks, you’re validating branch decisions with actual member and market data.
Where AI supports growth
On the growth side, AI-supported branches:
- Convert more loan conversations into funded loans
- Identify cross-sell opportunities with higher relevance (and less member annoyance)
- Spot members at risk of leaving and enable proactive outreach
- Track which branch experiences actually move the needle on wallet share
The point isn’t to impress members with technology. It’s to quietly increase the odds that every in-person interaction leads to healthier finances for the member and stronger economics for the credit union.
Bringing Servant Leadership Into AI-Era Branches
Kurt Klassen often points back to servant leadership as a core influence. That mindset matters even more when you’re adding AI into member interactions.
Here’s how servant leadership shows up in AI-enabled branch design:
- You use data to understand members more deeply, not to pressure them.
- You train staff to treat AI as an assistant, not a decision-maker.
- You design spaces that feel welcoming and human, even as you digitize the back end.
Member-centric banking isn’t a slogan. It’s a series of design choices where you repeatedly ask, “Does this make life easier, clearer, and fairer for our members?” If the answer’s no, the shiny AI tool or expensive architectural feature doesn’t belong.
Where To Start: A Practical 90-Day Plan
If your branch strategy feels dated and your AI investments live in a different lane, here’s a realistic starting approach.
- Pick one focus market and one branch. Don’t boil the ocean.
- Audit member journeys for that branch: which are high-volume, which are high-value, and which are broken.
- Pull the data: transaction patterns, appointment history, demographics, digital usage, and product mix for members in that branch’s catchment area.
- Identify 2–3 AI use cases that directly improve those journeys (for example, appointment triage, insight dashboards, or outbound “check-in” campaigns).
- Redesign only what’s necessary in the physical branch to support those improvements: signage, seating, consult spaces, and staff workflows.
- Train staff heavily on how to use the new tools while staying human-first.
- Measure aggressively for 60–90 days: satisfaction, conversion, wait times, staff confidence, and financial results.
Once you’ve proven the model at one branch, expand. That’s how you build an AI-smart, member-centric branch network without betting the entire CU on a single project.
Branch strategy and AI strategy aren’t separate roadmaps anymore. For credit unions that want to stay member-centric and grow in the next decade, they’re the same conversation.
Treat your branches as living proof of your data and AI capabilities: places where members feel known, supported, and confident making big financial decisions. If you get that right, growth tends to follow.
If your team is rethinking branch investment for 2026 and beyond, this is the moment to pair bold vision with smart data and AI—and build branches your members actually want to visit.