A bank branch is a physical office of a bank, away from its head office, where customers can open accounts, pay in and take out money, ask for loans and get help with other services. A branch is not a separate company: it is part of the same legal entity as the bank, uses the bank's licence and capital, and keeps its customers' records on the bank's central systems. Branches range from full-service offices with a vault, tellers and loan officers to small outlets with a few staff and machines.
For most of the history of modern banking, a branch network was how a bank reached customers and gathered deposits. That role has shrunk as people move to online and mobile banking, cash machines and agents, and many countries have seen large numbers of branch closures. Branches are still important for cash handling, complex advice, small businesses and people who cannot or will not bank online, which is why closures are a public policy issue and why alternatives such as agent banking have grown.
Bank branch in plain terms
Think of a chain of supermarkets. The company has a head office where decisions are made, but you do your shopping at the local store down the road. The store does not own itself; it is the same company wearing a local face. A bank branch is the local store of a bank.
When the chain notices that most shoppers now order online, it may close local stores and send vans instead. Banks are doing the same, replacing branches with apps, cash machines and shop counters that act for the bank. That suits people with smartphones but can leave others, especially older people and small shops that handle cash, with a long trip.
What happens in a branch
- Cash services. A cashier or teller takes deposits made with a paying-in slip, pays out withdrawals, and supplies coins and notes to local businesses.
- Account services. Staff open accounts, carry out Know Your Customer (KYC) checks, issue cards and a chequebook, and handle drafts and transfers.
- Lending and advice. Loan officers take applications for loans, mortgages and business credit, and some branches offer investment or insurance advice.
- Other facilities. Many branches have an automated teller machine (ATM), a night safe or cash box deposit, and a vault with a safe deposit box service.
Behind the counter, branches handle the bank's cash logistics, balancing tills each day under maker-checker controls, and they are a front line for spotting money laundering and fraud. A foreign bank may also open a branch in another country, which operates under the parent bank's capital rather than as a locally incorporated subsidiary.
Branchless and agent banking
Where building branches is too expensive, banks serve customers through third parties. In agent banking, a shop, pharmacy or post office acts as the bank's agent, taking deposits and paying out cash under a contract; see agents in the banking and financial services sector and payment services agent. Combined with mobile money, this model has brought many people into the formal system and is a pillar of financial inclusion policy.
Pakistan was an early adopter. The State Bank of Pakistan issued Branchless Banking Regulations on 31 March 2008, allowing commercial, Islamic and microfinance banks to serve customers through agents and mobile phones, and has revised them since. In the SBP's own account, Pakistan was the first country in South Asia to issue such rules.
Branch closures and access to cash
Branch numbers have fallen in many rich countries as customers move to digital channels, and a digital bank or neobank may have no branches at all. Closures raise concerns about access to banking and to cash, particularly in rural areas.
The United Kingdom responded with access-to-cash legislation. Under powers in the Financial Services and Markets Act 2023, the Financial Conduct Authority (FCA) introduced rules that took effect on 18 September 2024. They do not stop banks closing branches, but banks and building societies must assess the effect of a closure on local access to cash and fill significant gaps, for example with a shared banking hub, a deposit service or new cash machines; the cash machine network LINK carries out these assessments. In the US, banks must give advance notice to customers and their regulator before closing a branch.
Branches and the business model
Branches are expensive: rent, security, staff and cash transport add up, so banks review each location against the deposits and lending it brings in. On the other hand, a visible local presence still helps banks win small business customers and gather stable bank deposits, which is why some banks redesign branches as advice centres rather than closing them. A building society or credit union may keep branches as part of its mutual identity, and a community bank often relies on them. The choice between branches, agents and apps is now one of the main strategic questions in retail banking.