Back when people visited banks as their sole way to deposit paychecks, make large cash withdrawals and move money between accounts, branches were built to portray security and stability. An armed guard, few windows, and tellers tucked behind iron bars or bulletproof glass assured customers their money was safe. The point of branches was either to a) sit down at length with a banker to discuss a loan, mortgage or investment, or b) to get in, conduct your business and get out—hopefully without a long teller line in between.
While branches may have worked that way in the past, thanks to mobile tech they are now “about as relevant as an 8-track player,” says Kevin Blair, CEO of architecture and design firm NewGround.
But if you think architecture is at best a hippie-dippy answer to revamping branches, guess again. And again. Blair has helped design credit union and bank branches across the country and says financial institutions are radically rethinking how their stores serve customers.
From big banks such as Chase and Capital One to small credit unions and regional banks, many are breaking down the physical (and metaphorical) walls—and in the process transforming branches from transactional centers to open, inviting facilities that build trust and relationships.
Rebuilding bricks and mortar
Many of these new design concepts represent a far cry from yesterday’s designs and look more like cafes or living rooms than banks. Most combine technology and staff to serve customers, and strive to create unique experiences that connect banks with their respective markets.
At Umpqua Bank, a pioneer in the casual banking space, some locations host yoga classes. In Spain, CaixaBank’s imaginCafé goes as far as to host live shows, concerts, and deejay performances. And in the U.K., Virgin Money Lounges greet customers in a relaxing environment with a piano, library and a meeting space for community events. Arms-length teller windows? Not a chance.
While traditional branch design encouraged transactional customers to get in and out, today’s most innovative concepts strive to create cool places where people want to be.
“It’s all about the uniqueness of the retail experience…consumers now expect much more than someone that can cash a check and make a deposit,” Blair says. “It can be a place to stay a while.”
As most consumers now rely on technology for their day-to-day banking needs, branches serve a much different purpose than even a decade ago.
While some customers still use branches to deposit checks or make withdrawals, physical stores remain the dominant channel for opening new accounts or applying for loans, according to a February report by Deloitte. And as a first human point of contact, the branch carries a tremendous amount of weight in trust, reputation and brand building, the report states.
Recognizing the migration of day-to-day banking to online channels, Regions Bank introduced its Nexus branch concept in 2013 to focus more on brand building and service. Nexus locations vary from traditional branches with warm designs, lots of glass, natural materials and a bright green color to lighten things up, says Shawn Bradley, an executive vice president at Regions.
The bank has since expanded the concept to 50 locations and is remodeling and building all new branch locations in the same fashion. The bank conducts more than 40,000 customer interviews every month; many responded so positively that operations across the company are taking notice.
“The branch today is focused much more on advice and guidance,” Bradley says. “What we’ve learned from our Nexus experience has been filtering out into the bank itself and how we approach jobs and [customers].”
At Nexus locations, VTMs (virtual teller machines) enable customers to connect with remote bankers when needed, and the shift in branch means employees now handle all roles. As there is no longer a traditional segregation of tellers and salespeople, customers can see one person to get everything done, Bradley says.
Fifth Third Bank has also opened two of its own next-gen branches in Cincinnati and Chicago, with plans for another 100 such stores over the next three years, says Kevin Whitman, vice president of Design and Innovation.
The radical departure from the traditional “cold and sterile” environment features contemporary décor, bookshelves, high counters and casual meeting spaces, Whitman says. There’s even a technology wall with charging stations and a book selection (including books for kids) to entice people to stay.
“We’re looking to build spaces and create environments where people feel like they can come in and develop a relationship,” Whitman says. “We want customers to feel relaxed and open and like it’s a place that builds trust.”
Branch hybrids, big and bold
Banks spaces can create new concepts to speak directly to their markets. But if there’s one thing they all seem to share it’s to create a cool, casual, tech-driven environment—even if consumer response isn’t exactly mind blowing at first.
After middling results trying to keep alive coffeeshop-bank hybrids it inherited from the Dutch ING Bank, Capital One has doubled down in places where it had previously failed to gain traction and revamped its Capital One Café concept. As a cross between a coffee shop, a co-working space and a bank, these cafes are opening in many of the country’s largest cities—with Amazon Alexa devices set up to answer questions about finance, iPads for customers to use and even free financial coaching sessions.
Earlier this summer, a new Capital One Café opened up in the heart of Chicago’s bustling State Street shopping district—serving Peet’s brew in an area surrounded by dozens of competing coffee shops. A key difference: aside from hosting banking services, this two-story colossus more resembles an Apple Store than a bank branch or java hut. It boasts a mammoth staircase and floor-to-ceiling glass panels, some of which open wide on warm days, just inches from patrons hammering away nearby on laptops.
You don’t have to bank there to hang there—which has moved some skeptics to dismiss such concepts as wasted space for people to poach wi-fi. Then again, it’s hard to beat a captive audience for marketing to prospective customers you can treat to a taste of warm, personal service.
Not to be outdone, JP Morgan Chase also unveiled a new flagship bank branch in Midtown Manhattan in late June. The location—also harkening to Apple Store architecture—has flexible spaces, open lounges and roaming staff with devices to serve customers.
When small banks live large
In many cases, small or mid-sized institutions mount the most unique concepts.
For example, Union Bank opened The ARK, a digital branch in the Philippines that looks more like a hotel lobby or a phone store than a bank. The ARK features “interactive zones” where people can engage with the bank through touch screens. There’s even a virtual reality area where consumers can explore new vehicles, private rooms for business class customers, and a café. (No word on whether virtual ATMs dispense virtual cash.)
And in Britain, Clydesdale Bank and Yorkshire Bank joined forces to create B Works, a new “financial lifestyle space” where customers can “learn, work, and bank.” B Works functions more as a co-working space for freelancers, startups, small business entrepreneurs and self-employed professionals. It offers collaborative spaces, meeting rooms and free coffee throughout the days, with the added bonuses of Zumba classes, business lectures—and, of course, access to banking experts.
As big banks consolidate and smaller players test innovative models, “Everyone is talking and reflecting on their own branches,” Blair says. “They’re asking whether they’re competitive, progressive and integrating the technology and experience that consumers want.”
Increasingly, that experience boils down to banks that don’t look, feel or operate like the branches of old. Blair adds—with or without the gourmet coffee, mind you: “The competition has been stirred up.”
For more articles like this, check out our recent executive report: Building up the branch network.
Craig Guillot is a business writer who specializes in retail and finance. His work has appeared in such publications as the Wall Street Journal, CNBC.com, Bankrate.com and Better Investing.
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