Economic Essay Contest Face over interface: How smarter branches can reconnect with aging customers

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The notion that older adults are simply slow to embrace digital banking misses an important point. After helping my grandmother use a banking app, only to see her return to the branch the next week, I realized her behavior reflected preference more than incapability.

For many seniors, avoiding mobile banking isn’t just about technical barriers; it’s a deliberate decision shaped by comfort, trust, and a desire for personal interaction. As financial institutions accelerate their digital shift and reduce physical branches, these customers risk exclusion. In a rapidly aging society, banks must revisit their approach — not to reverse digitalization, but to pair it with smarter, more accessible offline options grounded in the everyday lives of older adults.

To understand the growing disconnect between digital services and older users, it’s important to move beyond the narrative of “falling behind.” Though some seniors struggle with digital tools, they often prefer clarity and security over speed or convenience. Faced with confusing interfaces, login errors, and the risk of mistakes, many find it simpler and safer to interact with a person face-to-face. This behavior also stems from a generational tendency to place greater trust in face-to-face interactions, especially for financial matters.

That’s why solutions like senior-friendly app modes or government-led digital banking education programs often fail to make a real impact. They overlook what older adults truly need from financial services.

Financial institutions have reduced the number of physical branches as a practical response to shifting customer habits and rising operational costs. As younger customers quickly adopted mobile banking, fewer people visited local branches, making it harder to justify the expense of maintaining them. Growing labor and real estate costs only added to the pressure, accelerating the move toward digital services and branch consolidation.

But this shift, while financially justifiable, has led to unintended consequences. Many older customers, those who still rely on face-to-face banking, now find themselves left out. Unlike banks, which have significantly reduced their physical presence, other parts of society have preserved older systems alongside digital alternatives.

Cash payments still persist, even in a world dominated by credit cards and mobile wallets. Public payphones exist alongside smartphones, and postal mail continues despite the rise of email. These older systems support those not fully transitioned to digital life. The same should apply to banking.

In some countries, such as the U.S. and the U.K., regulations limit how and when banks can close physical branches in order to protect vulnerable communities. In the U.K., banks must prove cash access won’t be disrupted before closing a branch. In contrast, Korea has issued only non-binding guidelines, and many banks avoid them by labeling nearby closures as “mergers.” Without stronger oversight, continued closures may further widen the gap in financial inclusion, especially for those least prepared to rely entirely on digital services.

While Korea has yet to enforce stronger regulations, some banks in other countries have demonstrated that digital efficiency and physical presence can coexist. One example worth noting is JPMorgan Chase, which between 2017 and 2022 closed 1,112 underperforming branches while opening 650 new ones in high-demand areas. This strategy allowed the bank to improve efficiency without losing its physical presence where it mattered most, making it the top U.S. retail bank by deposits in 2021.

The lesson is clear: fewer branches do not have to mean less accessibility if they are placed strategically.

The same logic can — and should — apply to Korean banks. Instead of reopening full-scale branches, banks can integrate essential services into public spaces that older adults already visit frequently. Locations such as community centers, traditional markets, and transport hubs are familiar, accessible, and benefit from steady foot traffic. Embedding financial services into these spaces helps sustain engagement by meeting existing demand in familiar, high-traffic locations. Employing local staff and collaborating with community organizations can also support job creation and stimulate the local economy.

Another practical approach is to operate compact, low-cost branches with minimal staffing. To maintain the human connection older customers value, these locations should be equipped with large displays, clear audio systems, and private booths for video consultations with remote advisors. This setup allows seniors to speak directly with professionals, even if they are in a different region. It preserves meaningful interaction while keeping fixed costs under control.

These digitally-assisted mini branches can be strategically integrated into the shared public spaces mentioned above, combining physical presence with accessibility and ensuring that essential services remain within reach for those who need them most.

Digital banking may define the future, but it cannot serve everyone equally. For Korea’s aging population, financial access still depends on having places to go and people they can trust. Eliminating offline options risks isolating those who rely most on human connection. Sustaining offline touchpoints — through shared public locations and compact service branches — will be key for banks seeking to attract and better serve older customers.

Lee Jae-hyeong is a student at Hanyang University.