Rethinking Real Estate
How financial services firms are adapting to a new era
BY BOBBY MAGNANO
The financial services industry is changing. This traditional, long-established industry is facing a crucial moment in its evolution. New emerging technologies, sustainability and changing demographics are all recalibrating expectations for financial services, from the way that people interact with their financial partners to how they want to manage money and wealth. Many of these changes have already started, and the industry will continue to undergo a serious transformation through 2030.
Financial services firms understand this is a critical inflection point that requires a holistic response. Real estate, in particular, will be integral for these firms to support growth and change, establish new business models and partnerships, and serve a new demographic of clientele with different expectations for financial partners. Client-serving locations like bank branches and wealth management centers, as well as the traditional office space, will need to be reimagined to align with new business objectives and growth goals.
The right real estate strategy can enhance the customer experience and improve talent acquisition and retention. Financial services firms will have to adapt real estate strategy around site selection, workplace management, and even commercial real estate (CRE) leadership roles and functions within the company. There are five ways that financial services firms should adapt CRE strategy to support the industry’s evolution.
1. ALIGN CRE STRATEGY WITH NEW BUSINESS OBJECTIVES
Financial services firms are evolving from a service-based business to one focused on strategic business partnerships. Deloitte noted this transformation years ago, calling for financial services institutions to transform operations to more closely resemble a technology company.
As the business format has evolved, financial services companies have also adapted growth plans, talent strategies and client demand. Now, real estate strategy must also align with these new business functions and objectives. However, financial services organizations have significant challenges in implementing a successful CRE strategy, with more financial services firms reporting difficulty thinking long term and a lack of talent availability compared to other organizations.
To meet evolving needs, the internal role of the CRE functions within the organization are transitioning to better align with new business objectives. As a result, the role of the CRE team is becoming more sophisticated, requiring leaders to be more strategic in site selection and location as well as the ability to understand the nuances of the business beyond just the real estate to best serve the organization. When the CRE leader understands the industry-specific challenges, business objectives, technology requirements and talent needs, they can develop the best real estate program for the organization. Moving forward, CRE leaders should be closely aligned with the operations and human resources teams to serve as a value-added partner.
2. HIGH-QUALITY ASSETS IN PREMIUM LOCATIONS
As strategic business objectives grow and change, so do real estate needs. Real estate is an essential part of the business’ operations, as it:
- reflects the tone and culture of the organization,
- is a tool for talent recruitment and retention, and
- supports day-to-day functionality.
As financial services firms become more sophisticated, the physical real estate should reflect that change. In addition, financial services firms anticipate growing employees and the CRE utilization rate through 2030, with more than half of firms expecting to grow in terms of square footage and number of locations, according to JLL’s 2025 Financial Services Real Estate Trends to Watch outlook. To support these changes, financial services firms are showing a preference for high-quality assets in high-quality locations.
Financial services firms are largely growing the headcount of younger professionals that have tech- and data-forward skillsets. High-quality real estate will help capture the attention of young professionals and create adaptable spaces that reflect new workplace preferences and formats, including everything from collaborative workspaces, on-site amenities and flexible work schedules. While financial services firms are actively seeking out spaces that fit this tall order, many are challenged to find the right spaces available in gateway locations. Limited new supply is constraining the market and could push some organizations to look for opportunities in alternative locations.
3. ADOPTION OF AI-INITIATIVES FOR CRE
The emergence of AI is among the most transformative trends in the financial services sector — and really everywhere else — this year. Already, financial services institutions have been quick to utilize advanced technologies like AI either through proprietary development or fintech partnerships.
Through the end of 2025, financial services firms and banks are expected to invest a staggering US$31 billion in AI capabilities. However, much of this adoption has been focused on client-facing applications, rather than directed at business functions, like CRE strategy, for example. Yet, there are significant gains to be made by utilizing AI as part of the CRE strategy. It can provide insights into day-to-day occupancy planning, workplace design, project design, lease administration and even the overarching workplace strategy.
Despite the enthusiasm, there is a gap between AI ambition and implementation. While 90 percent of financial services firms believe that AI can solve major CRE challenges, only 65 percent of organizations have a strategy to embed AI in the CRE toolkit, according to JLL’s Future of Work Survey. Momentum is coming, with 67 percent of financial services organizations planning to increase CRE technology spending through 2030, and 62 percent expecting offices to have tech-enabled capabilities in that same time. To gain the full value of AI, financial services firms need a comprehensive strategy that aligns with business objectives as well as other technology partners. This will help meet targeted outcomes and accelerate AI adoption.
of financial firms that believe AI can solve major CRE challenges
organizations that have a strategy to embed AI in a CRE toolkit
plan to increase CRE technology through 2030
expect offices to have tech-enabled capabilities through 2030
4. WEALTH MANAGEMENT STRATEGY EVOLVES TO SUPPORT NEW DEMOGRAPHICS
Wealth management will be a substantial area of growth for the financial services sector over the next two decades. According to JLL’s 2024 Wealth Management Branch Benchmarking Survey, by 2045 more than US$84 trillion in assets are poised to transfer from baby boomers to millennials. This will significantly change wealth management demographics as banks will begin serving a younger and more diverse clientele.
Financial institutions are responding to this shift in demographics as an opportunity. More than half of firms will increase funding into wealth management verticals, and 35 percent expect to increase funding by 20 percent, according to JLL research. In addition, financial services institutions will have to adjust wealth management strategies to meet new expectations, offering holistic advice, investments in environmental, social and governance (ESG) planning, cryptocurrency and private market investments.
Existing real estate is getting redesigned and reimagined to better serve this new group of customers. For example, 36 percent of firms have already redesigned existing spaces, 43 percent have refreshed spaces, and 29 percent are opening new locations to support wealth management growth, according to JLL’s Wealth Management survey.
To best serve younger clients, the spaces are becoming a blend of both face-to-face and digital interactions, with firms favoring stand-alone spaces and co-locations with retail spaces in both central business districts (CBDs) and in suburban markets. A quality wealth management location should be completely technology enabled, adaptable to new needs and offer client meeting and events.
As a result, more specialized spaces will likely open with fewer traditional bank branches. But the specialized hubs should also be reimagined as a modern social wealth club with high-end finishes, like leather, wood, marble and natural stone. Nearly half of financial institutions have already made these changes to wealth management spaces in the last five years.
MORE THAN
TRANSFER FROM BABY BOOMERS TO MILLENIALS BY 2045
IN ASSETS
5. EMPLOYEE EXPERIENCE DRIVES TALENT STRATEGY
Financial services firms have lofty growth goals over the next five years, and talent will play an integral role in achieving those goals and transitioning business lines. Financial services firms have ranked “attracting and retaining talent” as a top-two goal over the next five years, second only to growing revenue through expansion and mergers and acquisitions. Organizations are becoming strategic about talent acquisition, and many are willing to increase real estate spending to accomplish their talent goals, with 62 percent planning to increase spending on employee experience and holistic services and 60 percent planning to increase the overall CRE budget, according to JLL’s Future of Work Survey.
Employee experience is central to employee satisfaction, both in the back office and in the customer-facing lines of business. Firms understand the connection between customer and employee satisfaction, so employees need to be in quality, aesthetic spaces to better perform their jobs and best serve customers.
Organizations are extending real estate investment beyond the traditional office to frontline real estate spaces and workers through a holistic approach to experience management. A high-quality space should be flexible in design to meet evolving work preferences and habits. It should be sustainable and future-enabled, outfitted with current technologies to align with needs up to 10 years in the future. This will ensure that financial services firms are taking a long-term strategic approach to workplace design, not only responding to current trends. According to JLL Research, nearly half of firms (47 percent) are partnering with third-party experts to enhance workplace design and build spaces that embody this experience.
Real estate speaks for the institution
Financial services firms are experiencing a revolution, from digitizing the banking experience and forming fintech partnerships to absorbing increased cyber threats and a more robust regulatory environment. As financial services firms adapt, they are also rebranding themselves and their value for a new generation. Real estate will help firms communicate those changes and support a new way of doing business. The impact is real: financial services firms that make an investment in their real estate also make an investment in their future.