Q: “Is there an ideal branch format?”
A: The “ideal branch” of the future will be fully automated with robots or holograms serving as branch staff. The interior walls will reconfigure at the push of a button to create meeting rooms of different sizes and shapes with chairs popping out of the floor to fit any configuration. Branch signage along with interior finishes (wall colors, floor coverings, artwork, etc.) will be all digital. They will change remotely if the bank merges with a competitor. Customers will self-identify through retina scans or facial recognition. The facilities will be fully paperless, green and LEED-certified.
OK; maybe that’s a 25th Century blueprint.
In many of my recent engagements I’ve been asked that very question: “Is there an ideal branch format?” In whatever bank publication you pick up today, it seems someone has an opinion on the one ideal branch design. It’s smaller, heavily automated and uses digital signage. But …
I don’t believe in just one ideal branch design just as I don’t think there is one ideal car design. The real answer is: “It depends … on lots of things.”
For starters, foot traffic and available real estate dictate branch size. For banks with very busy branches—say, 10,000 teller transactions—you can’t comfortably squeeze what you need into a 2,000-square ft. space. And in some markets, the best available site might measure 3,500 square ft. when you only need 2,500. It might be impossible to subdivide it.
I think “ideal” designs likely change depending on situations. Let me describe one superior design that works with small-to-midsize community banks and credit unions, especially in smaller markets and more rural areas. These firms are more likely to have less foot traffic for teller transactions, and therefore sales opportunities. However, they likely have a large enough customer base to drive a steady volume of customer account servicing issues.
There are seven key elements:
Transaction zone: Due to the lower teller transaction volume, these firms should adopt video teller machines and centralize teller staffs offsite. When branches get below 4,000 to 5,000 transactions monthly, they will experience long intervals between customer visits. Why have two tellers standing around waiting for the next customer?
Technology has improved so much on these capabilities that banks can be confident in its functionality. So, one “section” of the branch needs to provide this capability: preferably to the back or side of the interior space to allow universal bankers to interact with those customers and thus enhance the experience. The universal banker can help customers initiate the transaction and if needed handle special circumstances the machines can’t, though these situations happen less as technology improves.
Self-service zone: You will still need a traditional ATM/self-service capability, and customers will need 24-hour access to those machines. Almost everyone knows how to use one, so little assistance is required. By design, you need to deploy machines either “thru-the-wall” or in a vestibule at the front of the space. In good weather areas, thru-the-wall machines work great and can help reduce the need for a larger branch interior as the queue line is outside on the sidewalk.
Private meeting spaces: You need private offices for the universal bankers to have private conversations with the customers. I’ve worked with banks who use offices; others use cubicles and even open desks. Every customer every sales opportunity is more important today and customers want privacy to discuss their financial needs. Why not provide it?
One of those offices should accommodate a conference table for at least 6-8 people. You’d be surprised how often you will use it. One should have two-way video conferencing capability. When a customer needs to speak with a specialist or universal banker and everyone is busy, you can connect them to another location.
Customer waiting area or living room: The customer waiting area should mimic a living room rather than a doctor’s office waiting room, a concept Virgin Money is trying in the UK. Think comfortable couches and chairs and television. I have seen beautiful examples of this approach in my travels, including one branch that had real books on bookshelves. A table or desk with a PC or tablet to access the bank’s website should be available in the living room, too. You never know how long some customer sessions might last, so give people a comfortable space to sit for 10-15 minutes if necessary.
Demonstration Area: This area should display digital and mobile capabilities for customers though if space is tight demonstrations could occur in an office.
Marketing Displays: Merchandising should be digital nowadays. It’s easier to update and customize for specific markets or locations. One digital poster should utilize a revolving display of current staff with some tidbits about them, such as where they went to school or their hobbies. This approach makes a great icebreaker for customers who might share a connection. Merchandising should be on the wall or support columns but avoid too many totem displays as they take up floor space and block sight lines.
Branding: Color schemes should match the firm’s brand but generally look warm and inviting. Remember: You want customers to feel comfortable and safe. Lighting should be bright in the transaction areas and subtler in the living room. To make a local connection, consider wall displays of local artists’ work or local historical imagery.
Space size will vary based on expected volumes and foot traffic, but you could execute this approach in spaces as small as 1500-1600 square ft.
Putting it all together: Personalized; private; performance tech
The bottom line is that the ideal branch space:
- Needs to be open and private
- Offer high tech solutions and highly personalized services
- Be warm and inviting
- Leverage technology to enable flexibility
The best way to operationalize this approach also involves extensive staff training on consultative sales and operational problem solving. Your staff members need to become the experts on how the bank works so customers get quick resolutions to any issues they might encounter.
Is there an ideal branch format? While it may not scale well to very busy locations, this version of an ideal branch works best for lower volume sites. Here’s hoping you’ve enjoyed this look the near future: Now, apply your vision.
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Jon Voorhees is an advisor at Austin, Tex.-based Peak Performance Consulting Group, which specializes in banking strategy. Before joining Peak, he was head of distribution strategy and execution for Bank of America. He can be reached at [email protected]
The author wishes to thank Ray Ehscheid (IA Interior Architects, practice area leader, financial services) for the sketch of this concept.
