The demise of brick-and-mortar bank locations has been greatly exaggerated. Although the total number of U.S. banks and credit unions is declining, according to the FDIC, banks are still opening an average of 1,000 new branches every year. And, despite the growing trend of digital banking, approximately 84% of bank customers still want to make occasional visits to their physical bank location.

SIZE: The Shrinking Footprint of Your Next Bank Branch

So while pundits may argue over the viability of traditional bank branches, everyone agrees on one thing: The size of new branch locations is getting smaller, for a number of very good reasons.

The first three of which is location, location, location. Banks and credit unions function best when located in the centers of population most likely to use their services. In heavily congested urban areas this can mean sky-rocketing real estate prices and shrinking available retail space. Unwilling to sacrifice a physical presence in prime market areas, major banks are exploring innovative ways to offer increased services in a shrinking footprint.

In addition to limited retail space, banks are facing growing competition from non-bank start-ups. To trim margins and better compete against these disruptive online services, traditional banks are turning to more cost-effective “micro-bank” branches. Some banks are experimenting with smaller facilities that take up as little as 350 to 600 square feet and are staffed by as few as three people.

Smaller branches and fewer staff would normally translate into reduced services and customer interaction. That’s where banks are turning to digital solutions and sophisticated technology to bridge the gap between size and service.

SOPHISTICATION:  Service with a smile, and perhaps a chatbot.

Instead of large marbled lobbies, banks are attracting customers with sleek, low-profile “digital bars.” A limited number of “digital ambassadors” encourage users to adopt the bank’s online products, freeing up other employees to help customers with more complex financial matters and investment options.

Some banks have recently introduced entirely automated branches which allow customers to conduct virtually all of their daily banking needs without the presences of a physical banker. High-tech ATMs allow customers to deposit checks and cash without deposit envelopes and are capable of cashing checks on the spot – right down to the exact coinage. If a customer encounters a problem, a bank employee is notified via a wireless tablet and interacts remotely with the customer until the service issue is resolved.

Some global banks are in the early stages of introducing automated chatbots, loosely termed “robo-advisors,” which are capable of offering suggestions on everything from how to save for children’s college to the best strategies for investing in the current economic climate.

STYLE: Would you like a latte with your checking account?

But don’t think the bank branch of the future is only offering sterile technology. The trend appears to be a pairing of hi-tech and hi-touch. In fact, many financial institutions are taking a page from the Starbucks’ playbook. Instead of building larger locations, they are designing smaller spaces that feature open-concept layouts and a sense of community. Bankers are no longer hidden behind counters, but rather interact with customers from the seat of a comfy couch.

And the gourmet coffee? That’s available too. Some banks are opening cafe-style branches to promote their online banking services. The sites look and operate like a neighborhood coffee shop, offering free wi-fi, work spaces and discounts on coffee and pastries for bank customers.

Still other banks and credit unions are patterning their new branches after trendy hotels and retailers, offering fresh cookies and chocolate coins. In hopes of being seen as an integral part of the local community, these sites feature free reading libraries and community meeting rooms which host everything from evening yoga classes to family movie nights.

Although no one knows exactly what the future of these blended usage branches will look like, one thing is certain. The need for a comprehensive security strategy will only continue to grow. How do you monitor access in 24-hour virtual branches? What additional measures are required for interactive ATMs? And, who is monitoring all of these off-site locations?

As  technology and consumer demands take the financial industry into uncharted territory, banks and credit unions are relying on trusted security partners like SPC Companies to design systems for the demands of the present and the challenges of the future.