How Indian banks are turning their branches into a CX goldmine

Introduction

In an age dominated by mobile apps, net banking, and instant digital payments, it's easy to assume that physical bank branches are becoming obsolete. But the reality tells a different story. Bank branches are transforming into strategic customer experience hubs, where high-touch service meets high-tech efficiency.

Today’s Indian consumers expect both convenience and connection. While digital channels offer speed, scale, and self-service, they often fall short when it comes to trust, personalisation, and complex financial decisions. This is where the modern branch steps in, not as a counter to digital, but as a complement to it.

Forward-looking banks are embracing phygital strategies that merge the best of physical and digital worlds. The result? Branches are evolving into experience centers that drive customer loyalty, boost revenue, and deliver differentiated service, turning them into CX goldmines.

The new role of bank branches: From transaction points to trusted advisors

For years, the function of a bank branch revolved around transactions, that included deposits, withdrawals, cheque clearances, and account management. But as these services migrated online, the branch's purpose began to shift. Today, Indian banks are repurposing branches not as transaction points, but as centers for advisory, relationship-building, and customer experience enhancement.

This transformation is backed by compelling data. According to a Deloitte study, 70% of banking customers value a consistent experience across channels, and 64% feel they cannot resolve issues quickly or at all through digital apps, highlighting the ongoing importance of in-person support alongside digital services. These are high-stakes, high-trust moments—ones where a face-to-face conversation still holds more value than a chatbot or app.

What’s more, Bain & Company research shows that customers who engage with their banks across multiple channels, including digital and in-person, are more loyal, hold more products, and generate higher lifetime value than those who rely solely on digital channels. Clearly, the future isn’t about choosing between digital or physical—it’s about intelligently combining both.

Global banking leaders have already caught on. Institutions like JPMorgan Chase and HSBC are investing in redesigned branches that integrate cutting-edge technology with personalised service. Even unconventional models like Capital One Cafés—offering financial advice in a relaxed, café-style setting—are redefining what a bank branch can be.

In India, this evolution is gaining momentum. Banks are realising that their branch networks, far from being liabilities, can become competitive differentiators—goldmines of customer experience, trust, and revenue when reinvented through a phygital lens.

Phygital banking - The future of customer experience

Phygital banking is the fusion of physical and digital experiences—an approach that allows banks to deliver seamless, personalised, and consistent services across all customer touchpoints. Rather than treating physical and digital as separate silos, phygital banking integrates them to create a unified journey where convenience meets human connection.

In India, where digital adoption is accelerating but trust in face-to-face interaction remains strong, the phygital model offers a powerful advantage. It ensures that customers can start a process online and complete it in-branch, or receive tailored advisory while enjoying the efficiency of self-service.

For banks, this approach isn’t just a customer-facing upgrade—it’s a strategic imperative. It allows them to:

• Deliver hyper-personalised experiences based on real-time data and customer preferences.
• Maintain emotional connection and trust for high-stakes interactions.
• Improve operational efficiency by automating routine services while freeing staff for complex engagement.

Phygital isn’t a buzzword—it’s a bridge. A bridge between expectation and experience, technology and empathy, automation and human touch. For Indian banks ready to reimagine their branches, it’s the future of CX.

CX goldmine: Key phygital Use cases for Indian banks

Transforming bank branches into customer experience hubs isn’t just about layout changes—it’s about embedding technology that enhances every step of the customer journey. Here’s how Indian banks are using phygital innovations to deliver differentiated experiences, build loyalty, and drive revenue:

1. High-value customer recognition

As soon as a premium customer enters the branch, video analytics identify them in real time. Personalised welcome messages are displayed on digital signage, and the assigned relationship manager is instantly notified with relevant client information. This enables priority service and tailored engagement from the moment they arrive, enhancing both satisfaction and loyalty.

2. Self-service with advisory integration

Routine banking tasks like deposits or address updates can be handled at smart kiosks, while more complex queries connect customers with remote advisors via secure video collaboration. It’s speed and convenience, with a safety net of expert guidance.

3. Personalised wealth management

Whether customers schedule meetings in-branch or online, phygital systems enable advisors to access real-time insights, including sentiment analysis, to make conversations more targeted and effective. It’s a powerful combination of empathy and intelligence.

4. Queue and sentiment management

Using video analytics, banks can monitor customer flow and mood in real time. Staff can be dynamically allocated to reduce wait times, improve satisfaction, and defuse negative experiences before they escalate.

5. Omnichannel continuity

A customer starts a loan application online, continues it via phone, and finishes it in the branch—without having to start over. Phygital systems ensure data flows seamlessly across touchpoints, creating a frictionless journey.

6. Secure and efficient operations

From IoT-based energy management that cuts costs to AI-powered surveillance systems that enhance branch security, phygital tools optimise operations behind the scenes—letting staff focus on customer care.

These use cases are not hypothetical—they're being piloted and scaled across leading Indian banks today. And as customer expectations grow, so will the demand for phygital innovation.

7. Conversational AI avatars for inclusive banking

Agentic AI-powered avatars are redefining self-service by acting as intelligent, multilingual virtual personal bankers. These avatars engage customers through voice-led interactions in multiple Indian languages, providing intuitive support for routine and complex banking needs.

This capability not only streamlines in-branch services but also plays a critical role in driving financial inclusion—particularly for individuals who are less comfortable with traditional kiosks, keyboards, or digital interfaces. By bridging language and technology gaps, AI avatars enhance accessibility while maintaining consistency in service delivery.

Why Indian banks must invest in phygital CX

With rising digital adoption, a growing millennial population, and increasing expectations for convenience and personalisation, banks can no longer afford to treat branches and digital platforms as separate worlds. A phygital strategy isn't just an upgrade—it’s essential for remaining competitive.

Here’s why investing in phygital CX makes business sense:

1. Build deeper customer relationships

Despite the rise of apps and chatbots, trust is still the currency of banking—especially for high-value services like home loans, business finance, or wealth advisory. Branches enable face-to-face interactions that foster deeper emotional connections and long-term loyalty.

2. Deliver hyper-personalised service

By leveraging real-time data and analytics, banks can create individualised experiences—from personalised offers to proactive support. Whether online or in-branch, each interaction becomes more relevant, more human, and more valuable.

3. Improve operational efficiency

Phygital tools automate routine tasks, reduce customer wait times, and optimise staff utilisation. This allows employees to focus on higher-value roles like financial consulting and relationship management, maximising both employee impact and customer satisfaction.

4. Bridge India’s Digital Divide

Not all customers are digitally native. By offering a seamless blend of physical and digital services, banks can serve a wider audience—including rural, elderly, or tech-averse customers—without compromising on experience or accessibility.

In short, phygital banking isn’t just about technology—it’s about transformation. It helps banks become more agile, inclusive, and customer-centric in a market where expectations are constantly evolving.

Tata Communications: Powering the future-ready phygital branch

Delivering seamless phygital experiences across India’s vast banking ecosystem requires more than just ambition—it demands a secure, scalable, and intelligent digital foundation. That’s where Tata Communications comes in.

With its Digital Fabric and edge services, Tata Communications equips banks with the infrastructure needed to transform traditional branches into dynamic CX hubs. From powering real-time insights to enabling cross-channel continuity, the company is redefining how banks operate at the branch level.

Here’s how Tata Communications supports phygital banking:

1. Real-time customer engagement

Using video analytics and AI-enabled digital signage, banks can recognise customers the moment they walk in and deliver personalised messaging or offers—elevating every visit into a tailored experience.

2. Seamless hybrid interactions

Through secure video collaboration and integrated self-service kiosks, Tata Communications enables banks to blend physical presence with remote advisory—allowing customers to get expert help, whenever and wherever needed.

3. Operational Optimisation

From IoT-based energy and security management to latency-free edge computing, Tata Communications ensures that every branch runs efficiently and securely, cutting overheads while enhancing performance.

4. Omnichannel Continuity

With a unified platform architecture, banks can ensure that customer interactions started online can continue in-branch without disruption—delivering a truly frictionless journey across all touchpoints.

In essence, Tata Communications provides the digital backbone for Indian banks to unlock the full potential of phygital CX—turning every branch into a smarter, more connected, and more profitable customer engagement center.

In summary

Bank branches in India are far from obsolete, they are evolving into strategic CX hubs that merge the trust of physical presence with the power of digital innovation. Phygital banking has become the new standard, enabling banks to serve diverse customers, deepen relationships, and streamline operations. With Tata Communications' secure, scalable infrastructure and edge capabilities, banks are well-positioned to lead this transformation. The future of Indian banking is not just digital—it’s phygital, human-centric, and already here.

Partner with Tata Communications to build secure, scalable, and intelligent phygital infrastructure. Contact us today to begin your journey toward future-ready banking.