NEW YORK—For years, the growth of mobile banking raised an obvious question for credit unions: If members can deposit checks, transfer money, open accounts and handle most routine transactions from a phone, how much longer will they need branches?
The answer emerging in 2026 is that members still want them—but for different reasons.
Credit unions are increasingly transforming branches from transaction centers into places for advice, financial education and relationship building, according to the August/September 2026 Credit Union Tracker from PYMNTS Intelligence, produced in collaboration with Velera. Instead of competing with digital banking, the branch is being redesigned to handle the interactions technology does not do particularly well: complicated financial decisions, major life events and conversations in which members want help from another person.
And rather than shrinking their physical footprints in response to digital adoption, many credit unions are preparing to invest more heavily in them.
A Wipfli survey cited in the report found 62% of credit union executives plan to open new branches and 58% intend to repurpose existing locations to support new banking experiences. Just 18% anticipate closing branches.
That investment is taking place even as digital engagement remains a top priority. Sixty-four percent of credit unions surveyed by Wipfli identified improving digital member engagement as their leading strategic priority. Among their strategies, 80% cited data analytics and predictive modeling, 69% cited 24/7 automated online account opening and 60% cited social media participation.
The apparent contradiction—investing heavily in both digital banking and branches—actually reflects how members increasingly expect to bank. Routine transactions can move to phones and self-service channels while employees who once spent much of their day processing deposits, withdrawals and account maintenance can devote more time to conversations and financial guidance.
“Credit union branches continue to shift from transaction hubs to trusted advice centers, and that evolution is exactly what members want. Even Gen Z, the most digitally fluent generation, still turns to in-person conversations for the moments that matter most—including opening accounts, planning major financial decisions and getting trusted guidance. The credit unions that win the next decade will be the ones that treat branches as strategic assets for building relationships, not legacy infrastructure,” the report states.
Even Gen Z Wants a Branch
Perhaps the strongest evidence that branches still matter comes from the generation assumed to need them least.
Gen Z consumers have grown up with smartphones and expect financial services to be available digitally whenever they want them. But research cited by PYMNTS shows that digital fluency does not necessarily translate into a desire to eliminate human interaction.
Twenty-eight percent of Gen Z consumers prefer receiving financial advice in person, compared with 46% who prefer online guidance. More strikingly, research from Adrenaline found 65% prefer opening new accounts in person, while 76% say they will act on personalized guidance received during an in-branch conversation.
That suggests the issue is not whether members are “digital” or “branch” customers. Increasingly, they are both.
Velera's Credit Union Growth Outlook describes Gen Z as an omnichannel generation comfortable moving between online and in-person banking. Members may expect an app to handle a balance inquiry or transfer immediately, but still want a person involved when the financial decision becomes more consequential.
Physical access also remains important for decidedly traditional reasons—particularly cash.
A Velera Eye on Payments study cited in the report found 86% of consumers expect to use cash within the next six months. One-quarter of credit union members visit an ATM weekly, and seven in 10 of those visits are primarily to withdraw cash. Roughly 30% of consumers in a separate survey identified ATM or branch access as their top concern.
A Different Kind Of Branch
All of this is changing what credit unions want their branches to look like and accomplish.
Among credit union executives planning to repurpose existing branches, 76% intend to convert them into advisory hubs, according to Wipfli. At the same time, 64% are enhancing ATM capabilities, effectively shifting straightforward transactions toward self-service while freeing employees and branch space for higher-value conversations.
Community engagement is another part of the transformation. Fifty-three percent of institutions repurposing branches are creating collaborative spaces for financial education, community meetings and member events. And when credit unions consider opening new branches, the decision increasingly involves factors beyond transaction counts: 63% cite digital adoption rates, 55% operating costs relative to revenue and 47% younger-member growth.
Credit unions also have another advantage for maintaining physical access without constructing a building everywhere members might need one: shared branching.
Through shared branching, participating credit unions make their locations available to members of other participating institutions, extending physical reach while spreading the cost of maintaining that infrastructure. The Co-op Shared Branch network, powered by Velera, now includes more than 5,550 locations nationwide, while the Co-op ATM Network provides more than 37,000 surcharge-free ATMs.
There is evidence members use that physical infrastructure. A Velera and Visa study found 63% of credit union members had visited a branch during the previous six months, while three in five said they had needed branch or ATM access at a time when one was not conveniently available.
Digital Banking May Be Saving The Branch
The larger lesson may be counterintuitive. Digital banking is not necessarily killing the credit union branch. By removing many of the low-value transactions that once dominated branch operations, it may be giving the branch a clearer reason to exist.
PYMNTS Intelligence recommends credit unions measure branch success by relationship outcomes rather than simply transaction volume, create seamless movement between mobile, ATM and branch channels, redesign locations around advice and education, and use shared branching and self-service technology to expand access without unnecessarily adding buildings.
That represents a significant change from the branch model that dominated banking for generations. Members no longer need to walk through the door every week to make a branch valuable. Instead, the branch increasingly earns its place in the delivery system by being available when a financial question becomes too important, complicated or personal for an app.
As the report concludes, the role of the branch “has not diminished. It has become more focused.” For credit unions able to combine digital convenience with meaningful face-to-face service, that more focused role could turn what once looked like expensive legacy infrastructure into a competitive advantage.