Does branch size directly correlate to earning capacity? Not if the increasingly popular “micro-branch” model is any indicator.
“Small is Beautiful”
Austrian economist Leopold Kohr first brought our attention to “the cult of bigness”, and coined the term, “small is beautiful” decades ago. But Kohr could scarcely have envisaged how today’s banks would realize his dream.
Inexpensive and Convenient
Tiny branches packing a big, full-service punch are sprouting up in nooks and crannies everywhere. From apartment buildings, to hotels and department stores, an efficiency revolution is underway. Micro-branches (or nano-branches) are designed to fit snugly into a variety of real estate configurations, with flexibility playing a key role.
Most importantly, while full-size branches may cost up to $2.5M to design and build, a micro-branch can be realized for around $450K.
Inexpensive and convenient, micro-branches open up new frontiers for banks and credit unions, raising brand awareness in new communities. Those who work in them are skilled multitaskers (“universal bankers”), offering a surprising combination of services in minimal space.
So branch footprints are shrinking while services are expanding? Who knew? A lot of people, it turns out. Expect to see plenty of graphs very soon showing exponential growth in micro-branches across North America.
A typical micro-branch meets some, if not most, of the following:
• Can be as small as 250-500 square feet.
• Located conveniently, i.e. in a larger store or hotel foyer.
• Positioned strategically in locales new to the brand.
• Offers various services that overlap physically within the branch.
• Movable walls separate lobby from rear office for nighttime access.
• Features bold brand messaging.
• Staffed by “universal bankers” versed in multiple retail concepts.
• Offers cash recyclers in addition to traditional ATMs.
Movable walls are proving to be a common feature of this smaller retail space. Some branches use them to partition off rear consultation booths from ATM lobbies at the front of the branch. The walls can be secured in place at the end of the workday, and customers can still take advantage of the branch’s convenient location for cash transactions.
Mini-branches (as they’re also known) often appear to be “branding heavy” but this is due to the much smaller business space not being as imposing as a full-size branch. Being smaller, the micro-branch needs to make its presence known to passers-by as effectively as possible. Retail communications for these little dynamos must out-shout the competition and whichever larger neighbors may be obscuring their visibility in the marketplace.
Micro-branch staff usually carry tablets or laptops, which they use to conduct business either in a private consultation booth, or right there on the shop floor. When one considers the behavioral shift of consumers in general, the nano-branch has arrived at the exact right time; staffing of branches is being revised, remote video tellers are gaining a foothold, and the “universal banker” concept is alive and kicking.
Universal bankers (or universal agents, as they’re also known) are trained to embrace the full range of services offered by modern financial institutions. Be it loan production, investment advice or straightforward cash transactions, the universal banker is there to support and facilitate.
Once they’re cross-trained, universal agents have a free role on the shop floor, greeting customers, determining the purpose of their visit, and guiding them to the appropriate retail zone inside the branch. This multi-role function is being adopted by all sizes of branch, but it is particularly fitting for micro-branches.
It’s probably fair to say that these versatile micro-branches, and those who staff them, are the Swiss army knives of the financial world.