"First, you pass by a small bank."
Wouldn't it be 傍 instead of 側? You pass it's nearness, not specifically it's side right? 傍 means near or nearby, while I think 側 means side. Using 傍 would mean you are passing through the small bank's "vicinity", which makes more sense to me. Otherwise you're talking about passing through the small bank's side.
you would just use そば, too much kanji does exist in japanese sentences, the duolingo sentence with はじめに instead of 初めに and そば instead of 側 or 傍 is the most natural one imo. はじめに used as an introduction of something is almost always written in kana, and the same with そば when talking about position of something. However both kanji can be read as そば but in the case of writing 傍 can also be read as はた or かたわら, in that last one you usually just write 傍ら, which is the one that means "side; edge; beside; besides; nearby"
"Hajimeni chisana ginkou ni toori masu." I put this as the answer, but was marked wrong for not putting the "no soba wo." But that's not what they asked me to translate! They didn't say "First, you pass by the area of a small bank." That sounds weird in English, but tells me what they expect me to write in Japanese. Should my answer have been accepted?
The thing you are passing along/by is the bank, so the sentence should still be correct. Like I said, the sentence does not say "First, you pass by a small bank's area." It says "First, you pass by a small bank." "Soba" refers to a space by something, as I understand it. If Duo wants me to translate a sentence from English into Japanese, then the sentence needs to contain all the components they want in the translated sentence. Would you never refer to a place without "no soba wo" just like how sentence subjects are usually omitted? Or, as the English sentence is only talking about passing by a small bank and not a small bank's area, should the omission of "no soba wo" be an acceptable translation? Thus far, I haven't been provided with an answer which makes sense for "no soba wo" to always be included whenever one is talking about passing by a place.
But given the fact that one can imagine a Japanese bank having a welcomer, saying to people, どうぞお通りください for "Please come in," 銀行をとおる might sound a little to much like "pass into the bank." EDIT Right after I posted, it came to me that the sentence I gave was referring to the entrance to the bank, not the whole bank, but it is conceivable 銀行を通る might be interpreted "through the bank (to some exit)," 銀行の中を, in some context. (And I personally would understand just plain 銀行を with nothing else as "by the bank," but it's better to be specific.