6 Retail Banking Trends Worth Exploring

Retail banking customers’ expectations are high and on the move. Here, experts recommend how community banks should respond to today’s key retail banking trends, including designing branches that blend both technology and the personal touch; offering novel deposit, loan and payment solutions; and partnering with social media influencers to attract more young people.

Trend #1: Hybrid branch strategies for retail banking growth

More and more community banks are adopting hybrid branch designs that balance digital capabilities with meaningful interactions with staff.

A successful hybrid model “builds trust, connects with people and shows up for their communities, while continuing to enhance the digital tools that people rely on,” says Benjamin La Macchia, senior vice president of La Macchia Group, a Milwaukee-based branch consulting and design-build firm.

Simply put: Digital alone isn’t enough, and physical branches alone aren’t enough either, La Macchia says. The future is a mix of both. 

“A strong hybrid model combines digital tools for everyday tasks with real human expertise for loans, mortgages and financial guidance,” he says. “Branches should be intentionally designed and located where they’re truly needed, and the experience should be seamless across mobile, web, branch and call center.”

To help bridge the gap between online and physical in a hybrid branch model, community banks should incorporate impactful digital signage, interactive displays and AI-driven tools to engage customers and provide real-time assistance, La Macchia says.

For even more high touch, community banks should create adaptable spaces that can accommodate financial consultations, community events and educational workshops, he says. With that, banks should emphasize open, welcoming layouts that encourage interaction and exploration.

Above all, a hybrid branch model should “reflect the community’s identity through design elements, while maintaining a cohesive brand presence,” La Macchia says.

Trend #2: Deposit growth strategies for community banks

Some community banks are adding novel features to deposit accounts to attract more customers, particularly younger generations.

One option is to move beyond offering traditional accidental death and dismemberment insurance programs to “more meaningful, everyday protection” by adding small amounts of life and wellness benefits directly onto checking and savings accounts, says Alex Matjanec, founder and CEO of Wysh.

The Brooklyn, New York, company offers banks Life Benefit, an embedded life insurance layer that sits directly on top of deposit accounts. According to Matjanec, it drastically reduces the need for a full insurance product rollout or heavy lift from the bank. All insurance bligations are handled by Wysh as the carrier, “while the bank simply offers a better deposit experience,” he says.

Wysh’s built-in coverage, typically 10% of the customer’s balance, subject to program limits, is automatically added to eligible deposit accounts, giving customers a reason to maintain higher, more stable balances, Matjanec says.

“When a bank extends coverage to its customers—automatically and at no extra cost—it signals care in a way that rate promotions can’t,” he says. “It’s a relationship builder, especially for younger customers who expect financial wellness to be built in.”

More community banks are also offering checking accounts with embedded financial wellness tools, including subscription management, real-time budgeting, credit score monitoring and, “most importantly,” credit score repair, says Corey Wrinn, managing director at Rivel Banking Research in Westport, Connecticut.

“Especially for younger consumers, how are you able to provide them the tools that they need to succeed?” Wrinn says. “You should also offer real-world advisement: ‘Open a checking account with us and you get access to our advisement team a couple times a year.’”

When it comes to getting more young people to open a mobile-only checking account without abandoning the process mid-stream, more community banks are deploying core data to make the process faster and to make it easier to transfer funds, says Lee Wetherington, senior director of corporate strategy for Jack Henry.

He cites one such solution from Moov, a Cedar Falls, Iowa, fintech that partners with Jack Henry. Consumers can upload a photo of their driver’s license to satisfy Know Your Customer requirements. Then, they can use Jack Henry’s Rapid Transfers on Banno, Jack Henry’s digital banking platform, to move funds near-instantly between their own accounts at different financial institutions, digital wallets or prepaid debit cards.

Not all deposit magnets are high-tech, though. Community banks should also consider tweaking their CD repricing strategies, says Gabe Krajicek, CEO at Kasasa in Austin, Texas. He suggests not changing the rate on all CDs. Rather, banks could just reprice on balances above a certain amount.

“Then, you effectively get to the same cost of funds, but you do it with less collateral human damage,” Krajicek says.

Trend #3: Alternative lending and innovative underwriting solutions

Consumers are being drawn to financial institutions that offer novel lending solutions and alternative underwriting practices that extend credit to worthy people who don’t have established histories.

Community banks can take advantage of the coming “refi bonanza” across all types of loans, including auto and personal loans, as interest rates continue to be lowered, Kasasa’s Krajicek says. Kasasa offers a “Take-Back Loan,” where consumers can pay ahead on their fixed-rate auto or personal loan to reduce debt and still access those extra funds if they need them.

On the loan’s dashboard, borrowers can make payments and withdraw from their take-back balance, and they can see the impact of these changes before making them.

“The consumer has flexibility to move their balance up and down however they want, as long as it never exceeds the original amortization schedule or they miss a payment,” Krajicek says. Kasasa maintains very tight controls, resulting in 30% lower charge-off rates than traditional loans, he notes.

When it comes to alternative underwriting, more community banks are leveraging non-traditional elements of credit scores to help more consumers obtain credit. FICO is enabling this with FICO Score XD and UltraFICO Score, says Gigi Ligons, senior director of scores client services.

“FICO Score XD is a score that leverages alternative data sources including landline, mobile and cable payments, public record and property data, and credit bureau data to give community bankers [another option] to assess consumers who are often viewed as credit ineligible,” Ligons says.

UltraFICO Score is an alternative data score that maps consumer-permissioned cash flow data—historical and current information about the money flowing in and out of a consumer’s checking, savings and money market accounts—into the FICO Score scale, she says.

“Scoring more consumers with alternative data scores provides more opportunities for community impact [through deeper lending] and net interest income, especially for products like bankcards, small-dollar lending and personal loans,” Ligons says.

Community banks can also better compete with buy-now-pay-later (BNPL) giants Klarna, Splitit and Affirm by offering equipifi’s white-labeled BNPL platform, says Jack Henry’s Wetherington. The Scottsdale, Arizona, fintech’s platform is integrated into Jack Henry’s digital banking platform.

Trend #4: Digital small business payment solutions

Community banks can attract more sole proprietors, particularly the younger set, by giving them a way to receive same-day funds on payments accepted within the bank’s mobile app, which is much faster than Venmo, PayPal or Cash App, Wetherington says.

He adds that Jack Henry’s partnership with Moov also enables community banks to offer enhanced digital payment services to their small business customers. They can accept payments with the tap of a phone, receive same-day funds for payments accepted and automate reconciliations to accounting software packages.

Trend #5: AI and automation in retail banking operations

Operationally, community banks should be viewing generative AI as an essential tool in 2026 and beyond, La Macchia says. Automating tasks like loan underwriting, credit checks, compliance and fraud detection lets staff focus on relationship-building and high-value advisory work instead of routine processing.

Community banks can use generative and agentic AI models to streamline their account opening process, “to affect all manner of gains and efficiency,” Wetherington says.

Trend #6: Digital marketing strategies for community banks

Consumers are increasingly facing “digital fatigue” as ads pop up on every screen, so community banks should find more creative ways to break through the noise, says Wrinn, of Rivel Banking Research.

For example, community banks can sponsor local sporting events to build brand awareness and trust—and then use geofencing during those events to deliver hyperlocal, hyperspecific ads on attendees’ phones, he says.

Community banks can also partner with social media influencers who have amassed sizable followings with their trusted advice. 

“It’s a nice way for banks to start to think about how to break out of that mold,” Wrinn says. “Who are they partnering with to build their brand and identity in a different way?”

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