How does a community bank compete with much larger organizations? Personal service is a common approach. But Hauppauge, N.Y. based Bank of Smithtown goes a step further to include branch differentiation.

“You have to find a way to differentiate yourself,” said Executive Vice President and Chief Retail Officer John Romano. “And for us, that was through branch design.”

In a presentation Tuesday at BAI’s SmartTactics conference in Las Vegas, Romano described how Bank of Smithtown builds branches that resemble “a cross between Starbucks and your living room.”

The boldest move taken, Romano said, was doing away completely with traditional teller stations and queue-up lines. Customers who enter one of the bank’s new “universal” branches are greeted by a banker, usually the branch manager, and then escorted to the appropriate waiting area for transactions, new accounts, loans or investments.

Instead of waiting in line for transactions, such as cashing a check, the customer can sit in a chair while a banker handles the transaction and watch a television screen providing cable news, local news and the bank’s own advertising.

Romano said this floor configuration is more convenient for customers than a traditional teller line. “As you’re waiting, you’re not just standing idly watching somebody count your cash,” he said.

Another design innovation is that customers sit next to the bankers rather than across the desk from them so both can view the computer screen. “We feel that more positive things come out of just having conversations with people,” Romano said. “You’re able to uncover things that a customer would normally not divulge.”

Bank of Smithtown’s final key differentiator is to turn its branch employees into what it terms “bank pros” (actual business card title for everyone except branch managers). Every employee is trained to handle nearly all jobs in the branch, rather than specialize in being a teller, for example.

Romano said the point of this is to handle a customer’s needs immediately, with the employee at hand, rather than needing to hand them off. “Tennis has tennis pros and golf has golf pros,” Romano said. “Why can’t we as a bank have bank pros? All we’re doing is indicating that this person is an expert in their field.”

Bank of Smithtown is a $878 million-asset institution with 13 branches located on Long Island’s north shore. Romano said six of these branches have been built in the new style since the beginning of the decade and six more will be added in the next two years. While the seven oldest branches are being upgraded, they will retain the traditional teller station because of the cost and complexity of completely revamping them, he said.

Asked to measure the bank’s return on its investment in the universal branches, Romano cited their success in gathering new deposits. In 2005, he said, 33% of the bank’s total deposit increase of $182 million came from three new universal branches.

For more information about innovation in branch design, see“Banking at the ‘Neighborhood Store’” in issue 16 and “Branch Design: For Employees as Well as Customers” in special issue 2 of BAI Banking Strategies Retail Delivery Insights.

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