While digital transactions have taken a bite out of walk-in traffic, the brick-and-mortar branch is far from obsolete. Forward-looking financial institutions are using new technology and smart renovations to transform the traditional branch into a unique environment that differentiates their organization from the next. Rather than offering the same transactions customers can access on their tablet or smartphone, the new branch is designed for high-value services such as advice, loans and small business services.
A growing number of financial institutions are investing in this type of experience – with good reason. Considering that branches represent 66% of the non-interest expense for the average financial institution, it’s easy to see how ineffective locations can become a drain on profits. The good news is that a thoughtfully reconfigured branch outfitted with the right technology can become a valuable component of the overall customer experience. And many trailblazing financial institutions are already having successful results.
Redesigned Floor Plan
One strategy for supporting interactive, collaborative discussions in the branch is breaking away from the traditional floor plan. Many banks are instead opting for an open layout, where employees aren’t confined behind a counter or desk.
San Antonio, Tex.-based Broadway Bank, for example, has replaced teller lines and new accounts desks with cash bars and iPad stations. The bank has also added self-service coin machines that let customers manage more transactions on their own, helping to free bankers for in-depth conversations. NB&T in Sycamore, Illinois, has gone a similar route, replacing the teller counter with flexible teller pods equipped with a cash recycler to automate cash handling and encourage meaningful interactions.
Financial institutions like Broadway Bank that cross-train their bankers to handle multiple requests have the right idea. The same personal banker can guide customers through a wide range of transactions, rather than sending customers to the new accounts desk and then handing them off to a teller. Of course, this model is most effective when technology provides quick and easy access to multiple functions – preferably through a tablet. If bankers aren’t spending time switching between applications and rekeying information, they can offer customers undivided attention.
Bankers should be careful not to assume that younger consumers disdain branch visits. Research shows that while Millennials are more likely to use the mobile channel for balance notifications and routine transactions, they like to know in-person advice and support is available – especially when they are undertaking complicated transactions or have a question about their account.
Chester Springs, Pa.-based Conestoga Bank understands this reality and has designed a new branch, called “Bankwerx,” focused on delivering the type of experience Millennials are looking for. In addition to offices where customers can get one-on-one advice, Bankwerx features personal teller machines and a “Werx Bar” equipped for online account opening and loan applications. While the goal is to increase branch efficiencies and attract a younger demographic, the changes have been well-received by customers of all ages.
When headed down the path of branch transformation, it can be helpful to visit financial institutions that have already incorporated innovative elements, such as Broadway, NB&T and Conestoga. It can also be helpful to evaluate staffing models at the outset to improve employee buy-in to the new branch concept. A bank’s audit and compliance teams also need to be involved early on to overcome any security concerns with the open teller line.
At the end of the day, there is no single best approach to branch transformation. Data needs to inform the big decisions, so the right analytics are essential. And the new branch should enhance a financial institution’s overall brand, because ultimately, that’s what defines an organization, attracts new business and reinforces loyalty.
Mr. Dominguez is market strategy director, Bank Solutions, for Brookfield, Wisc.-based Fiserv. He can be reached at firstname.lastname@example.org.