What Do Today’s Progressive Bank Branches Look Like?

As we advance into the digital age, it’s become standard for financial industry commentators to speculate on the future of the branch and to ask “what will the branch of the future look like?” assuming they believe that branches will still exist in the future.

For the record, there’s little doubt that branches will exist in the future.  Not until we’re all strapped into full-body simulations 24/7 will we consider trusting our hard-earned money to people we’ve never met and who cannot ever be located physically.  It’s a basic human confidence issue, testified by the fact that 80% of Millennials responded to a SurveyMonkey study saying they wanted the option to walk into a bank branch. In another survey conducted by Qualtrics in conjunction with Accel, 8,000 adults were surveyed to determine different approaches to money and payment options based on age.  “80% of millennials said they still carry cash, and 64% stated that they carry cash most of the time,” reported Mike Maughan, head of global insights at Qualtrics (a millennial himself).  If Millennials—the generation whose behaviors industry analysts are trying most to predict—still want to visit branches and use cash, it’s fair to say that reports of the death of the branch are greatly exaggerated.

Modern, progressive bank branches are designed to be efficient, welcoming and fresh, with extensive branding and merchandising.

So, what are the most progressive banks doing with their new branches today?  They are:

1.  Using strategic location experts to find the best sites for new branches in markets where the brand resonates with the demographic.

2.  Employing financial industry-focused architectural/construction firms to design/build or renovate branches based on data.

3.  Converting to open concept banking, prioritizing customer relationships, and enhancing the workplace experience for their own employees.

4.  Maintaining advanced customer databases to track and predict customer behavior, and respond in timely fashion to specific needs throughout their lifecycle.

5.  Integrating modern retail communications elements into their branding and merchandising, such as digital-interactive flat screen displays and window projections.

Branding for banks today has to be complete, including carpet designs, furniture and color palette applied to walls, etc.

1.  Using strategic location experts to find the best sites for new branches in markets where the brand resonates with the demographic.
When it comes to attracting customers or members, banks and credit unions function much the same as other retail brands.  Just as certain people prefer to shop at Target instead of Walmart, people prefer one financial institution (FI) over another, and there is usually a pattern to this based on peoples’ socioeconomic group, ethnicity, or some other defining parameter.  Strategic location experts can determine which socioeconomic groups feel most connected to a financial brand by studying the most successful branches in that FI’s network and the markets they’re in.  They can then perform extensive market and socio-economic analyses to refine these assumptions, as well as a banking node analysis to determine which of the FI’s competitors are doing business in that same area.  A truly professional location consultant will physically visit the site itself to be absolutely sure that it lives up to its value based on the data.
FI’s looking to expand their branch networks, or close failing branches and open new ones at better locations, often believe they have to find the best deal in terms of price to purchase or lease.  But Mike Goman (President of strategic location firm Accubranch) says, “Grade-A retail locations are about productivity, not cost.  Cheap locations don’t do any business.”
This key fact may not occur to FI’s with little to no experience in finding new branch locations.  Basing decisions on cost alone, or deciding to develop a site because it is owned by an associate or even a customer, can cost a financial institution dearly in the long term.  40% of financial institutions fail to meet deposit goals in the first five years after opening new branches.  Don’t be one of them.  Be progressive.  Hire a strategic location expert to find the best site for your new branch, and design that branch for the market it serves.

2.  Employing financial industry-focused architectural/construction firms to design/build or renovate branches based on data.
Just as a financial institution may erroneously decide to buy or lease land or property because they have an existing relationship with its owner, so they also may choose someone they know to design and build or renovate their new branch.  This has never been a good idea, and even less so now we’re in the branch transformation era.  Progressive financial institutions are doing things differently, with good reason.  People designing and building bank branches and credit unions today have to be better-informed than ever before.  There are too many moving parts and crucial spatial/technological considerations involved to use an inexperienced architect and builder.  Forward-thinking FI’s know that industry-focused design-build is the safest and most efficient methodology for delivering new or renovated branches that function optimally and will remain relevant for years to come.
It might seem like an easy proposition to simply do some research on latest best practices for branch design, and to present your findings to a generic architect, who will then discuss this with a random general contractor, who in turn must take bids from the various sub-trades, etc., and from this disparate process a gleaming new branch will be created.  You hope.
Compare this with using a design-build company that specializes in architectural design and construction for the financial industry.  This company understands the “inside baseball” vocabulary and possesses a seasoned knowledge of branch design.  They are experienced enough to know which seemingly great ideas don’t work in practice.  Their architects, estimators, project managers, and site superintendents have designed and built dozens, if not hundreds, of branches.  It’s easy to imagine how much more efficient and purposeful the planning, architectural design, and construction phases of this project are when working with this type of company.
But most importantly, a truly progressive specialist firm can partner with a strategic location expert and determine not just where to site a new branch, but also how to design that branch to optimally perform in that market.  Market analytics and transaction audit data can tell you which delivery channels are most preferred by that particular market and therefore which channels to design the branch around (older demographics prefer face-to-face contact with human beings, while younger markets are more comfortable using video technology).  The smarter financial institutions are using market data to drive branch design.  Be one of them.  Don’t get saddled with cumbersome or inappropriate branch models that fail.

A Massachusetts transformed bank branch showing pods, branding and interesting finishes that bring it into the 21st century.

3.  Converting to open concept banking, prioritizing customer relationships, enhancing the workplace experience and carefully selecting their employees.
The main reason it is so important to use an industry-experienced architect and builder (preferably a company that both designs and builds branches) is because branch models have evolved towards a more open concept in the past five years, and non-industry designers probably won’t know this.  Teller lines are being replaced with pods, and engagement between branch employee and customer/member has deepened significantly.  Universal bankers—employees with a diverse skill set and knowledge of the FI’s products and services—are replacing traditional tellers.  The most modern and future-focused FI’s are offering a customer experience that is almost unrecognizable compared with the branch visit of yesteryear.  The dialogue banking concept is new to many FI’s and many need help with understanding how customers are using today’s branches.  Younger customers have demonstrated a need to visit brick-and-mortar branches to receive advice and engage in human interaction.  Branches offer an opportunity for direct communication with real people of a kind that technology doesn’t, and progressive FI’s know that this opportunity is not to be wasted.
Branches today are comprehensive financial resources and community destinations rolled into one, which is why location is so important.  FI’s have to make sure they make this transition properly and give themselves the best chance of succeeding with their particular customer base.
An alternative to the universal banker strategy is the Interactive Teller Machine (ITM).  ITMs are basically a video version of an ATM, though some models offer far more than just an audio-visual link to a teller in a video call center.  Customers can perform a far greater range of transactions on an ITM (some of which are known as advanced terminals) including but not limited to loan and bill payments, account transfers, check cashing and credit card payments.  ITMs can be deployed in so-called “tellerless” branches, where there may be a concierge desk and one or two private offices in which to conduct business with a financial specialist that may or may not be a universal banker.  ITMs enable considerable cost savings while allowing teller access to customers after-hours and at weekends (including Sundays in some cases).  The implementation may be costly but when deployed across multiple branches the savings are significant and there is a greater probability of success.
Another aspect of modern branch design that shouldn’t be overlooked is that of improving the workspace experience of branch staff.  This includes identifying and training the right personalities for the universal banker role, as well as installing ergonomic and functional millwork and furniture.  Pods and concierge desks are replacing teller lines, and the people deployed there are a new breed.  The type of young professionals FI’s find desirable for this position are outgoing, friendly, versatile and able to work with the newest technology.  A universal banker is expected to know significantly more than a regular teller and is paid more.  These kinds of people will be more discerning in their choice of career, the environment where they’re expected to do their job, and the company culture they’ll be part of.  Innovative FI’s that understand how crucial it is to hire the right personalities for this role are meticulous in their interviewing and training.  They work hard at developing an impressive image and voice for their brand because it needs to be on point in order to attract the kind of talent that maintains a successful platform.  Dialogue towers, engaging personalities who can learn many different aspects of banking, enhanced customer experiences, and a fresh, welcoming feel, are indispensable qualities for modern branches in today’s competitive market.  Anything less is now conspicuous and appears badly outdated.

Electronic media, beverage bars and sleek teller pods in a modern Connecticut bank branch.

4.  Maintaining advanced customer databases to track and predict customer behavior, and respond in timely fashion to specific needs throughout their lifecycle.
The retail world has used big data for several years now to great effect.  It enables merchants to send timely email newsletters, conduct retargeting campaigns via Web ads, send direct mail campaigns based on previous purchases, etc. and it’s given marketing a ubiquitous presence in our lives.  It is now second nature to expect surveys and questionnaires from companies to whose newsletters and savings clubs you’ve subscribed and to expect those companies to somehow know where you are in your customer lifecycle.  The banking industry has been slow to adopt this newer retail approach and is poised to make up for lost time.  Big data can be applied by financial institutions to great effect, as they have the most important data of all—peoples’ finances.
An important first step is for the FI to realize that whenever a person actually makes the effort to visit the branch, it presents a strong possibility for starting a real relationship.  Relationships are built on the data collected not just on initial contact but every time the customer revisits the branch or engages with the FI via any channel.  This data must be properly entered into a customer relationship management (CRM) system and can include personal and professional information of virtually any type imaginable (birthday, marital status, home address, hobbies, etc.).  A universal banker with a tablet can ask the branch visitor any question and instantly enter it into the FI’s CRM.  This data can then be accessed manually or automatically by employees or integrated marketing platforms, and customer needs anticipated in timely fashion.  Very few FI’s have incorporated this type of data collection and integrated marketing practice into their standard operating procedure, so those who do will appear advanced indeed.  Banks and credit unions that implement this capability before the competition will hold a distinct advantage in terms of customer/member relationships, brand presence, and convenience.  A young couple renting an apartment can receive emails promoting home loans, middle-aged couples can receive offers about wealth management, or any other information whose recipient instantly recognizes as something they may need at the time they receive it.  It is this ability to anticipate where each customer is in their lifecycle that will set FI’s apart from the rest in the next five years.  Be remembered as one of those who “got it” before the rest, who offered convenience and really understood their clients.  Be remembered as a properly modern financial institution by acting now and being prepared for the advent of Artificial Intelligence (AI), when these systems will largely function independently.

A credit union in New England with attractive branding and ITM machines, with a concierge desk where members can receive help and advice.

5.  Integrating modern retail communications elements into their branding and merchandising, such as digital-interactive flat screen displays and window projections.
FI’s have embraced the branding concept for a while now, but branch banking has more recently changed and we have entered the age of full-on retail technology.  It is perhaps this aspect of branch modernization that was responsible for the expressions “branch of the future” and “customer experience” more than anything else, as electronic and interactive marketing media truly injects a “wow” factor into any branch visit.  But forward-thinking FI’s know that to truly embrace the future they must survive in the present.  Simply waiting until AI is developed enough to be an instant solution, with flat screen displays and beacons sending personalized messages to customers as they enter the branch, will only mean your organization is losing ground right now in the race to retain and attract new customers.  Environmental branding and merchandising for banks and credit unions today creates significant visual impact, enlivens the branch space, and stimulates customers into action through vivid promotion of products and services.  Custom branch designs by specialist companies can feature architectural integration of branding elements built into key areas of the space, so the FI’s branding is at the very core of the physical branch.  Branding should never be an afterthought.  The organization’s logo, graphics and color palette should surround customers/members with the FI’s brand identity, showcasing the brand and its uniqueness.  This applies to the exterior as well as the interior of the branch, as the brand needs to penetrate into the street from the branch interior to attract passing foot traffic.
The difference between a financial institution that is progressive and one that hasn’t yet taken the plunge is very obvious where branding and communications are concerned.  Let’s face it; banking has never been an industry anxious to follow the herd, as bankers have existed outside the collective need to be accepted and valued based on appearance.  Financial institutions held all the aces for a long time, and felt above and beyond the need to function as a typical high street store.  Those times are gone.  Banks and credit unions now have to differentiate themselves from the noise by being more innovative and attractive than their competitors.  Branding and retail communications are playing a central role in this transformation, and are more than just window dressing in dialogue banking.
Design companies specializing in the financial industry will follow their own custom branding process for each individual case.  This process may depend on whether or not the FI intends to refresh or completely rebrand their organization.  A rebrand often begins with a single branch and the effort is gradually expanded to other branches and the corporate headquarters in time.  A first step is to assess the opportunities available for the FI in question, based on its demographic, network geography, community variability and other factors.  There will then be an initial meeting with the client to determine the scope of the effort, followed by the development and refinement of brand concept options.  The final production files will eventually be formatted for the fabrication and installation phase, where branding and merchandising elements will be physically integrated into the space.  If the FI is working with a financial industry focused design-build firm with its own architect, some of the core branding may have been incorporated into the shape and structure of the branch design itself, and not just tacked onto the surface later.

A "Smart Bar" in a Connecticut credit union with interactive touch-screen technology and modern graphics and branding.

The above five points are not the only ones progressive financial institutions see as important, but they seem to fit a pattern that is fast solidifying as the correct operational protocol when it comes to transforming the branch platform to the new dialogue model that is sweeping world banking.  For more information, contact Solidus today.  We can help.

A curved branded pod in a New England bank, with digital content displayed on a flat screen and other branding elements.